Plantronics 2009 Annual Report Download

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A
nnual Report
2009

Table of contents

  • Page 1
    Annual Report 2009

  • Page 2

  • Page 3
    ..., During fiscal year 2009, Plantronics, along with its industry peers, experienced a decline in revenues as a result of the global economic downturn. Because of lower spending by financial services customers in North America, the year began with a slowdown in Office and Contact Center revenues and...

  • Page 4
    ... competitive edge. To date, we have secured a number of customer trials of our products for UC and expect to maintain our position as a leading provider of headsets for this new market opportunity. We have adapted well to market changes throughout our 40+ year history, and it appears that the shift...

  • Page 5
    ... of incorporation or organization) (I.R.S. Employer Identification Number) 345 Encinal Street, Santa Cruz, California (Address of principal executive offices) 95060 (Zip Code) (831) 426-5858 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the...

  • Page 6
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  • Page 7
    ... and Related Transactions, and Director Independence Item 14. Principal Accounting Fees and Services Part IV. Item 15. Exhibits and Financial Statement Schedules Signatures Plantronics, the Plantronics logo design, Altec Lansing, Clarity, CS70N, inMotion, and Sound Innovation are trademarks or...

  • Page 8
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  • Page 9
    ... and accessories for the business and consumer markets under the Plantronics brand. We are also a leading manufacturer and marketer of high quality docking audio products, computer and home entertainment sound systems, and a line of headphones for personal digital media under our Altec Lansing brand...

  • Page 10
    ... hearing impaired. Our ACG segment targets enhanced communications for offices and contact centers, mobile and cordless phones, and computers and gaming consoles. We offer our products primarily under two brands - Plantronics and Clarity, although we also offer music-first headsets under the Altec...

  • Page 11
    ...a variety of features and technologies, including noise-canceling microphones, Digital Signal Processing ("DSP"), and more; wireless freedom allowing people to take and make calls as they move freely around their office or home without cords or cables; multi-tasking benefits that allow people to use...

  • Page 12
    ... other wireless devices, and is digitally encrypted for maximum call security. DSP is a technology that delivers acoustic protection and optimal sound quality through noise reduction, echo cancellation, and other algorithms to improve both transmit and receive quality. · Markets Our ACG products...

  • Page 13
    ...stereos, CD players, cameras and PCs are converging to create a market for new network devices. This change is driving the demand for new high-end, flexible digital solutions in home theater, video gaming and personal audio. Higher portability, connectivity and wireless technology are other industry...

  • Page 14
    ... array of headphone products for portable stereos, CD players, MP3 players and other audio devices, and home audio and home theater products. In the second quarter of fiscal 2008, the Company transitioned the responsibility and management of Altec Lansing branded PC headsets from the AEG segment to...

  • Page 15
    ... production to meet customer demands. During fiscal 2009, we developed innovative products that enabled us to better address changing customer demands and emerging market trends. Specifically, we introduced a number of new products, which featured new technologies to address both the ACG and AEG...

  • Page 16
    ... Dongguan, China and Hong Kong to a new site located in Shenzhen, China. SALES AND DISTRIBUTION We maintain a direct sales force worldwide to provide ongoing customer support and service globally. We use commissioned manufacturers' representatives to assist in selling through the retail channel. We...

  • Page 17
    .... Wireless carriers do not manufacture headsets, but distribute our headsets as a Plantronics-branded product or under their own private label. Mobile OEMs, on the other hand, generally require their own design and will sell products under their private label. Our telephony service provider channel...

  • Page 18
    ... stoppage in our Suzhou, China plant as a result of our March 2009 restructuring announcement that we will be discontinuing Bluetooth production at this location in fiscal 2010. That stoppage was resolved, and we believe that in China, and throughout the world, our employee relations are good. 10

  • Page 19
    ..., General Manager Home & Home Office President, Clarity Equipment Managing Director, Europe, Middle East & Africa Senior Vice President, Worldwide Operations Vice President, General Manager, Business to Business Solutions Mr. Kannappan joined Plantronics in 1995 as Vice President of Sales and...

  • Page 20
    ... and Olufsen Group, a global manufacturer of consumer electronics. Mr. Trads holds a degree in Business Administration and Management from the Copenhagen Business School in Denmark. Mr. Vanhoutte joined Plantronics in 2003 as Managing Director of Europe, Middle East and Africa ("EMEA"). From 2001...

  • Page 21
    ... of Plantronics. ITEM 1A. RISK FACTORS Investors in our stock should carefully consider the following risk factors in connection with any investment in our stock. Our stock price will reflect the performance of our business relative to, among other things, our competition, expectations of securities...

  • Page 22
    ...to B2C customers as well as our product mix. In the AEG segment, our prices and gross margins are generally lower for our PC Audio products than for our Docking Audio products; therefore, our profitability depends, in part, on our mix of PC Audio to Docking Audio products. The size and timing of our...

  • Page 23
    ...for consumer products. For B2B products, long life-cycles periodically necessitate last-time buys of raw materials which may be used over the course of several years. We routinely review inventory for usage potential, including fulfillment of customer warranty obligations and spare part requirements...

  • Page 24
    ... from other consumer electronics companies that currently manufacture and sell mobile phones or computer peripheral equipment. These competitors generally are larger, offer broader product lines, bundle or integrate with other products' communications headset tops and bases manufactured by them or...

  • Page 25
    ... International. Our product markets are intensely competitive, and market leadership changes frequently as a result of new products, designs and pricing. We are facing additional competition from companies, principally located in the Asia Pacific region, which offer very low cost headset products...

  • Page 26
    ... certain parts of the office markets. In particular, we anticipate a trend towards more integrated solutions that combine audio, video, and software functionality, while currently our focus is limited to audio products. We are also experiencing a trend away from corded headsets to cordless products...

  • Page 27
    ...assemblies, components and products. Lead times are particularly long on silicon-based components incorporating radio frequency and digital signal processing technologies and such components are an increasingly important part of our product costs. In particular, many B2C customer orders have shorter...

  • Page 28
    ... throughout Asia, including GoerTek, Inc. who will be the sole manufacturer of our Bluetooth products located in Weifang, China. We also generate a significant amount of our revenues from foreign customers. The inherent risks of international operations could materially adversely affect our business...

  • Page 29
    ...by management to improve the profitability of the AEG segment do not materialize, it is reasonably possible we may be required to record additional impairment charges related to the Altec Lansing trademark and trade name in future periods, whether in connection with our next annual impairment review...

  • Page 30
    ... and contact center products must meet certain standards to work with local phone systems. Certain of our wireless office and mobile products must work within existing frequency ranges permitted in various jurisdictions. As regulations and local laws change, we must modify our products to address...

  • Page 31
    ...recommendations by securities analysts; developments in our industry; sales of substantial numbers of shares of our common stock in the public market; our ability to successfully complete the product refresh for the Altec Lansing products and turn around the AEG business; general economic, political...

  • Page 32
    ... company, and our suppliers or customers. Our major business operations are subject to interruption by earthquake, flood or other natural disasters, fire, power shortages, terrorist attacks, and other hostile acts, public health issues, and other events beyond our control. Our corporate headquarters...

  • Page 33
    ... financial officer or independent registered public accounting firm determines in the future that our internal control over financial reporting is not effective as defined under Section 404, investor perceptions may be adversely affected and could cause a decline in the market price of our stock...

  • Page 34
    ... executive offices are located in Santa Cruz, California. Our facilities are located throughout the Americas, Europe, and Asia. The table below lists the major facilities owned or leased as of March 31, 2009: Location Audio Communications Group Chattanooga, Tennessee Hoofddorp, Netherlands San...

  • Page 35
    ... against the Company alleging that our Bluetooth headsets may cause noise-induced hearing loss. Shannon Wars et al. vs. Plantronics, Inc. ...hear the objections in early July 2009. We anticipate that the settlement will be approved in the second quarter of fiscal 2010. We believe that any loss related...

  • Page 36
    ... EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES Price Range of Common Stock Our common stock is publicly traded on the New York Stock Exchange. The following table sets forth the low and high sales prices as reported by an independent source, under the symbol PLT...

  • Page 37
    ... price of $11.54 per share. As of March 31, 2009, there were 911,000 remaining shares authorized for repurchase. The following table presents a month-to-month summary of the stock purchase activity in the fourth quarter of fiscal 2009: Total Number of Shares Purchased as Part of Publicly Announced...

  • Page 38
    ... the years ended March 31, 2007, 2008 and 2009, respectively. See Note 11 of the Consolidated Financial Statements and related notes, included elsewhere, herein. In November 2007, we announced plans to close AEG's manufacturing facility in Dongguan, China, to shut down a related Hong Kong research...

  • Page 39
    ... the planned closure of ACG's Suzhou, China Bluetooth manufacturing facility in fiscal 2010. As a result of these activities, $12.0 million in restructuring and other related charges has been included in our consolidated results of operations for the year ended March 31, 2009. See Note 8 of the...

  • Page 40
    ... and accessories for the business and consumer markets under the Plantronics brand. We are also a leading manufacturer and marketer of high quality docking audio products, computer and home entertainment sound systems, and a line of headphones for personal digital media under our Altec Lansing brand...

  • Page 41
    ... original design manufacturer model for Bluetooth which will reduce inventory and ultimately enable us to sell our plant in China; a broad-based tightening of capital expenditures which we believe will yield a 50% reduction in capital expenditures globally in fiscal 2010 compared to fiscal 2009; and...

  • Page 42
    ... and engineering Selling, general and administrative Restructuring and other related charges Gain on sale of land Total operating expenses Operating income $ 676,514 381,034 295,480 100.0% 56.3% 43.7% Fiscal Year Ended March 31, 2008 $ 747,935 403,863 344,072 100.0% 54.0% 46.0% $ 2009 674,590...

  • Page 43
    ... engineering Selling, general and administrative Restructuring and other related charges Impairment of goodwill and long-lived assets Total operating expenses Operating loss $ 123,640 110,305 13,335 100.0% 89.2% 10.8% Fiscal Year Ended March 31, 2008 $ 108,351 103,318 5,033 100.0% 95.4% 4.6% $ 2009...

  • Page 44
    ... offset in part by an increase in sales of Mobile headsets due to an improved product portfolio and demand attributable to certain hands-free driving laws going into effect in the U.S. in fiscal 2009. In the third quarter of fiscal 2009, we began shipping the next generation of AEG products with the...

  • Page 45
    ... to a year-over-year increase of $29.8 million in our Bluetooth headsets net revenues, partially offset by a decline of $4.8 million in net revenues from corded mobile headsets. Gaming and Computer Audio product net revenues increased due to the transfer of the Altec Lansing branded PC headsets into...

  • Page 46
    ... Information Fiscal Year Ended March 31, March 31, 2007 2008 Fiscal Year Ended March 31, March 31, 2008 2009 (in thousands) Net revenues from unaffiliated customers: United States Europe, Middle East and Africa Asia Pacific Americas, excluding United States Total international net revenues...

  • Page 47
    ... to end of life certain models in our Bluetooth portfolio of products coinciding with the decline in consumer demand due to poor economic conditions and our announcement in March 2009 to outsource Bluetooth manufacturing to an existing supplier in China, thus limiting the number of Bluetooth models...

  • Page 48
    ... channels where open box warranty returns often occur more frequently than through other sales channels, higher freight expenses as a result of increased rates, a longer supply chain, and a less favorable product mix as corded products, which typically have higher margins than cordless products. AEG...

  • Page 49
    ... fiscal 2009 were the design and development of wireless office system products; UC products; Bluetooth products and technology; developing common architectures across multiple products and increasing the use of common components across product lines; and the refresh of product lines for AEG. We...

  • Page 50
    ... the bankruptcy of a significant international distributor. AEG Selling, general and administrative expenses decreased primarily due to the following decreased compensation and recruitment costs of $2.0 million primarily related to reduced headcount; decreased retail representative commissions of...

  • Page 51
    ... service fees of $3.4 million primarily related to increased retail representation fees resulting from higher net revenues and increased fees for accounting and tax services. These increases were offset in part by a decrease of $3.8 million in marketing and sales promotions. AEG Selling, general...

  • Page 52
    ...plans to close AEG's manufacturing facility in Dongguan, China, shut down a related Hong Kong research and development, sales and procurement office and consolidate procurement, research and development activities for AEG in our Shenzhen, China site. The selling, general and administrative functions...

  • Page 53
    ... intangible assets primarily associated with the Altec Lansing trademark and trade name and $4.1 million related to property, plant and equipment related to the AEG segment. There was no impairment related to the ACG reporting unit. We performed our annual review of goodwill and purchased intangible...

  • Page 54
    ...other related charges. Operating margins may vary based on product mix shifts, product life cycles, and seasonality. We believe the AEG segment will generate relatively small losses in the first half of fiscal 2010 and should be profitable in the second half of fiscal 2010 based on new products with...

  • Page 55
    ... tax laws in the U.S. or internationally, a return to profitability for the AEG business, or a change in estimate of future taxable income which could result in a valuation allowance being required. On April 1, 2007, we adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes...

  • Page 56
    ... benefit related to deferred income taxes. Working capital uses of cash consisted primarily of increases in inventory and accounts receivable. Inventory increased to support higher overall volumes and the transition of manufacturing of consumer headsets to our manufacturing facility in Suzhou, China...

  • Page 57
    ... at our corporate headquarters in Santa Cruz, California, expansion of a warehouse facility in Milford, Pennsylvania, and the purchase of machinery and equipment, tooling, computers and software and net purchases of shortterm investments of $1.1 million, offset by $2.7 million related to the sale of...

  • Page 58
    ... Temporary Liquidity Guarantee ("TLG") program administered by the Federal Deposit Insurance Corporation ("FDIC") insurance. The current terms of the TLG providing for the unlimited insurance are in force through December 31, 2009. While we monitor bank balances in our operating accounts and adjust...

  • Page 59
    ...of fiscal 2010, we entered into a standby letter of credit agreement with Wells Fargo which we use to secure small letters of credits with vendors as requested. As of April 25, 2009, we had $0.2 million in commitments under the new agreement. We enter into foreign currency forward-exchange contracts...

  • Page 60
    ... in this Annual Report on Form 10-K for factors that could affect our estimates for future financial needs and sources of working...than 5 years 993 993 Effective April 1, 2007, we adopted the provisions of FIN 48. As of March 31, 2009, the liabilities for uncertain tax positions and related interest ...

  • Page 61
    ... on revenues if product lives vary significantly from management estimates, a particular selling channel experiences a higher than estimated return rate, or sell-through rates are slower causing inventory build-up. Co-op advertising and marketing development funds are accounted for in accordance...

  • Page 62
    .... For our commercial products, long life-cycles periodically necessitate last-time buys of raw materials which may be used over the course of several years. We routinely review inventory for usage potential, including fulfillment of customer warranty obligations and spare part requirements. If...

  • Page 63
    ... for one or two years, depending on the type and brand, and the location in which the product was purchased. Where specific warranty return rights are not given to the customers but where the customers are granted limited rights of return or discounts in lieu of warranty, we record these rights...

  • Page 64
    ...by management to improve the profitability of the AEG segment do not materialize, it is reasonably possible we may be required to record additional impairment charges related to the Altec Lansing trademark and trade name in future periods, whether in connection with our next annual impairment review...

  • Page 65
    .... As of March 31, 2009, we had $11.1 million of unrecognized tax benefits all of which would favorably impact the effective tax rate in future periods if recognized. We continue to follow the practice of recognizing interest and penalties related to income tax matters as a part of the provision for...

  • Page 66
    ... to market risk related to changes in interest rates and foreign currency exchange rates. This discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results could vary materially as a result of a number of factors including those set forth in "Risk...

  • Page 67
    ... Euro Great Britain Pound Net position Position Sell Euro Sell GBP USD Value of Net Foreign Exchange Contracts $ 24.9 9.3 $ 34.2 $ $ Cash Flow Hedges Approximately 39%, 39% and 38% of revenue in fiscal 2007, 2008 and 2009, respectively, was derived from sales outside of the U.S., which were...

  • Page 68
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Plantronics, Inc.: In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all ...

  • Page 69
    PLANTRONICS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) March 31, 2008 ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts...) Retained earnings Less: Treasury stock (common: 18,351 and 2,928 shares at 2008 and 2009, respectively) at cost Total ...

  • Page 70
    PLANTRONICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) 2007 Net revenues Cost of revenues Gross profit Operating expenses: Research, development and engineering Selling, general and administrative Restructuring and other related charges Impairment of goodwill ...

  • Page 71
    ... Purchase of treasury stock Proceeds from sale of treasury stock Proceeds from issuance of common stock Repayment of line of credit Payment of cash dividends Excess tax benefit from stock-based compensation Cash (used for) provided by financing activities Effect of exchange rate changes on cash and...

  • Page 72
    ... options Issuance of restricted common stock Repurchase of restricted common stock Cash dividends declared Stock-based compensation Income tax benefit associated with stock options Purchase of treasury stock Sale of treasury stock Retirement of treasury stock Balances at March 31, 2009 47,538 331 79...

  • Page 73
    ... accessories for the business and consumer markets under the Plantronics brand. The Company is also a leading manufacturer and marketer of high quality docking audio products, computer and home entertainment sound systems, and a line of headphones for personal digital media under the Altec Lansing...

  • Page 74
    ... based upon quoted market prices at the end of the reporting period where available. The Company's ARS investments are carried at fair value based on a discounted cash flow model. As of March 31, 2009, all investments, except the ARS, are classified as available-for-sale with unrealized gains and...

  • Page 75
    .... For the Company's commercial products, long life-cycles periodically necessitate last-time buys of raw materials which may be used over the course of several years. The Company routinely reviews inventory for usage potential, including fulfillment of customer warranty obligations and spare part...

  • Page 76
    ... in the prior year. The discount rate was adjusted from 13% used in the prior year to 14% reflecting the current volatility of the stock prices of public companies within the consumer electronics industry. For the market comparable approach, the Company reviewed comparable companies in the industry...

  • Page 77
    ... reduces pricing, the Company may incur reductions to revenue for price protection based on management's estimate of inventory in the channel that is subject to such pricing actions. Advertising Costs Plantronics expenses all advertising costs as incurred. Advertising expense for the years ended...

  • Page 78
    ... functional currency of the Company's European finance, sales and logistics headquarters in the Netherlands, sales office, warehouse and distribution center in Hong Kong, sales office and warehouse in Japan, and manufacturing facilities in Tijuana, Mexico and Suzhou, China and foreign research and...

  • Page 79
    ... to trade receivables are generally limited due to the large number of customers that comprise the Company's customer base and their dispersion across different geographies and markets. Plantronics performs ongoing credit evaluations of its customers' financial condition and generally requires...

  • Page 80
    ... 141", "Business Combinations". SFAS No. 141(R) retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized and measured in purchase accounting. It also changes the recognition of assets acquired and...

  • Page 81
    ... ("ARS"). The ARS were classified as available-for-sale as of March 31, 2008. During the third quarter of fiscal 2009, the ARS were transferred to trading securities at which time the Company recorded unrealized losses of $4.0 million related to its ARS within Interest and other income (expense...

  • Page 82
    ... purchase the ARS at par value beginning on June 30, 2010, the Company transferred its ARS from long-term investments available-for-sale to long-term trading securities. The transfer to trading securities in November 2008 reflects management's intent to exercise its put option during the period from...

  • Page 83
    ...value based on Level 3 inputs which consisted of reviewing the Reserve's underlying securities portfolio comprised primarily of discounted notes, certificates of deposit and commercial paper issued by highly-rated institutions. Based on this analysis, the Company concluded that the fair value of its...

  • Page 84
    ... (useful life: 7-30 years) Machinery and equipment (useful life: 2-10 years) Software (useful life: 5 years) Construction in progress Less: Accumulated depreciation and amortization $ Accrued liabilities: Employee compensation and benefits Warranty accrual Accrued advertising and sales and marketing...

  • Page 85
    ... Warranty provision relating to products shipped during the year Deductions for warranty claims processed Warranty obligation at March 31, 2009 $ $ 7,240 22,095 (18,894) 10,441 21,595 (19,612) 12,424 6. GOODWILL The changes in the carrying value of goodwill during the fiscal years ended March...

  • Page 86
    ... tax benefit associated with this impairment charge. In the fourth quarter of fiscal 2009, the Company performed the annual impairment test of the goodwill related to the ACG reporting unit, which indicated that there was no impairment. The assumptions used in the annual impairment review performed...

  • Page 87
    ...: Gross Carrying Amount March 31, 2008 (in thousands) Accumulated Amortization Net Amount Useful Life Technology State contracts Patents Customer relationships Trademarks Trade name - inMotion Trade name - Altec Lansing OEM relationships Total $ 30,160 1,300 1,420 18,133 300 5,000 59,100...

  • Page 88
    ...the AEG segment do not materialize, it is reasonably possible the Company may be required to record additional impairment charges related to the Altec Lansing trademark and trade name in future periods, whether in connection with its next annual impairment review in the fourth quarter of fiscal 2010...

  • Page 89
    ... "Employees' Accounting for Post-employment Benefits" ("SFAS No. 112"). Q3 Fiscal 2008 Restructuring Action In November 2007, the Company announced plans to close AEG's manufacturing facility in Dongguan, China, shut down a related Hong Kong research and development, sales and procurement office and...

  • Page 90
    ... other related charges in future periods. In addition, the Company continues to review the AEG cost structure and may implement additional cost reduction initiatives in the future. The following table summarizes the Company's restructuring activities: Severance and Benefits Facilities and Equipment...

  • Page 91
    ... engaged in various legal actions arising in the normal course of business including six class action lawsuits recently filed against the Company alleging that our Bluetooth headsets may cause noise-induced hearing loss. Shannon Wars et al. vs. Plantronics, Inc. was filed on November 14, 2006 in the...

  • Page 92
    ... may be entitled to purchase the Company's stock or stock of an acquirer of the Company at a discounted price in the event of certain efforts to acquire control of the Company. The rights expire on the earliest of (a) April 12, 2012, or (b) the exchange or redemption of the rights pursuant...

  • Page 93
    ...of 300,000 shares of common stock (which number is subject to adjustment in the event of stock splits, reverse stock splits, recapitalization or certain corporate reorganizations) for issuance to non-employee directors of Plantronics. At the end of fiscal year 2009, options to purchase 66,000 shares...

  • Page 94
    ... $33.49, which was equal to the fair value of the underlying stock on the grant date. The Company also issued 5,000 shares of restricted stock to Altec Lansing employees with a purchase price of $0.01 per share under the Inducement Plan. At March 31, 2009, options to purchase 40,875 shares of common...

  • Page 95
    ...vested at March 31, 2008 Granted Vested Forfeited Non-vested at March 31, 2009 Number of Shares (in thousands) 288 187 (92) (20) 363 The total fair value of restricted stock awards vested during the year ended March 31, 2009 was $2.5 million. Stock-Based Compensation The following table summarizes...

  • Page 96
    ... $ 4.74 $ 6.20 $ 4.56 Fiscal Year Ended March 31, Expected volatility Risk-free interest rate Expected dividends Expected life (in years) Weighted-average grant date fair value The expected stock price volatility for the year ended March 31, 2007, 2008 and 2009 was determined based on an equally...

  • Page 97
    ... table summarizes the Company's outstanding foreign exchange currency contracts, and approximate U.S. dollar equivalent, at March 31, 2009 (local currency and dollar amounts in thousands): Local Currency 18,700 6,500 USD Equivalent $ 24,876 9,296 EUR GBP Position Sell Euro Sell GBP Maturity...

  • Page 98
    ... on Accumulated other comprehensive income (loss) for the fiscal year ended March 31, 2009: Amount of gain (loss) reclassified from OCI to income (loss) (effective portion) $ 4,505 $ (in thousands) Foreign exchange contracts designated as cash flow hedges $ March 31, 2008 (6,217) $ Amount...

  • Page 99
    ... credit Goodwill impairment Other, net Income tax expense (benefit) $ $ $ The effective tax rate for fiscal 2007, 2008 and 2009 was 18.5%, 19.8% and 23.4%, respectively. The effective tax rate for fiscal 2009 is higher than the previous year primarily due to the change in foreign versus...

  • Page 100
    ... the decline in value of the ARS offset by the Rights. The Company has also established a $0.1 million valuation allowance in relation to the operating losses of one of its foreign subsidiaries where there is an insufficient history of earnings to support realization of the deferred tax asset. 92

  • Page 101
    ...benefits related to various jurisdictions may be reduced as a result of the lapse of the applicable statute of limitations by the end of fiscal 2010. The Company cannot reasonably estimate the reductions at this time. Any such reduction could be impacted by other changes in unrecognized tax benefits...

  • Page 102
    ... internal management reporting system. The accounting policies of each operating segment results are substantially the same as those used by the consolidated Company. Financial data for each reportable segment for the fiscal years ended March 31, 2007, 2008 and 2009 is as follows: Fiscal Year Ended...

  • Page 103
    ... "Office and Contact Center", which includes corded and cordless communication headsets, audio processors and telephone systems; "Mobile", which includes Bluetooth and corded products for mobile phone applications; "Gaming and Computer Audio", which includes PC and gaming headsets; and "Clarity...

  • Page 104
    ...headphones and home audio systems. 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, 2008 2009 (in thousands) Net revenues from unaffiliated customers: Docking Audio...

  • Page 105
    ... indicated its accounting year ended on March 31 and our interim quarterly periods as ending on the applicable month end. 1 In November 2007, the Company announced plans to close AEG's manufacturing facility in Dongguan, China, to shut down a related Hong Kong research and development, sales and...

  • Page 106
    ... the Altec Lansing trademark and trade name and $4.1 million related to property, plant and equipment related to the AEG segment. In the third quarter of fiscal 2009, the Company announced a reduction in force in AEG's operation in Luxemburg and Shenzhen, china and ACG's operations in China, Mexico...

  • Page 107
    ... (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of...

  • Page 108
    ... Plantronics' website under the Corporate Governance section of the Investor Relations portal (www.plantronics.com). Stockholders may request a free copy of the Corporate Governance Guidelines from the address and phone numbers set forth above under "Code of Ethics." ITEM 11. EXECUTIVE COMPENSATION...

  • Page 109
    ... item is included under the caption "Proposal One - Election of Directors" subhead "Director Independence" in the 2009 Proxy Statement and is incorporated into this Item 13 by this reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this item is included under the...

  • Page 110
    ... documents are filed as part of this Annual Report on Form 10-K: (1) Financial Statements. The following consolidated financial statements and supplementary information and Report of Independent Registered Public Accounting Firm are included in Part II of this Report. INDEX TO CONSOLIDATED FINANCIAL...

  • Page 111
    ...PLANTRONICS, INC. SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (in thousands) Charged Balance to at Expenses Beginning or Other of Year Accounts Allowance for doubtful accounts: Year ended March 31, 2007 Year ended March 31, 2008 Year ended March 31, 2009 Warranty reserves: Year ended...

  • Page 112
    ... 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PLANTRONICS, INC. May 26, 2009 By: /s/ Ken Kannappan Ken Kannappan Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY...

  • Page 113
    ... filed on January 20, 2009). Certificate of Retirement and Elimination of Preferred Stock and Common Stock of the Registrant filed with the Secretary of State of Delaware on January 11, 1996 (incorporated herein by reference from Exhibit (3.3) of the Registrant's Annual Report on Form 10-K, filed...

  • Page 114
    ... located in Tijuana, Mexico (translation from Spanish original) (incorporated herein by reference from Exhibit (10.5.4) of the Registrant's Quarterly Report on Form 10-Q (File No. 001-12696), filed on August 6, 2004). Lease dated December 7, 1990 between Canyge Bicknell Limited and Plantronics...

  • Page 115
    ... by reference from Exhibit (10.14.5) to the Registrant's Annual Report on Form 10-K, filed on June 2, 2003). Form of Change of Control Severance Agreement, dated on or about January 26, 2009, between Registrant, Barbara Scherer, Don Houston and Rich Pickard (incorporated by reference from Exhibit...

  • Page 116
    ...Plantronics, B.V., and GoerTek, Inc. Worldwide Code of Business Conduct and Ethics (incorporated herein by reference from Exhibit (14) of the Registrant's Annual Report on Form 10-K, filed on May 31, 2005). Subsidiaries of the Registrant Consent of Independent Registered Public Accounting Firm Power...

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  • Page 118
    Company's Stock Performance Set forth below is a line graph comparing the annual percentage change in the cumulative return to the stockholders of Plantronics common stock with the cumulative return of the NYSE Stock Market index and a peer group index for the period commencing on the morning of ...

  • Page 119
    ... Team Clay Hausmann Donald Houston Ken Kannappan Barry Margerum Vicki Marion Renee Niemi Mike Perkins Barbara Scherer Joyce Shimizu Carsten Trads Philip Vanhoutte Larry Wuerz Chuck Yort Vice President Corporate Marketing Senior Vice President Sales Chief Executive Officer, President and Director...

  • Page 120
    ... and accessories for the business and consumer markets under the Plantronics brand. We are also a leading manufacturer and marketer of high quality docking audio products, computer and home entertainment sound systems, and a line of headphones for personal digital media under our Altec Lansing brand...