Plantronics 2009 Annual Report Download - page 41

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33
Throughout fiscal 2009, we remained focused on our long-term strategy to capitalize on the opportunities in the office and mobile
markets and be well-positioned for Unified Communications (“UC”). While staying focused on our long-term strategy, we also made
decisions to broadly reduce spending in light of the global recession and its impact on our market and near-term revenue potential.
We believe we now have the right balance between short and long-term considerations and that we will maintain, if not increase, our
relative competitive position through the economic downturn and its eventual recovery.
Looking forward into fiscal 2010, we are focused on the following key corporate goals to maximize long-term shareholder value:
• Be profitable and cash flow positive. We announced and implemented several restructuring plans in fiscal 2009 along
with other cost cutting measures, including management salary reductions, to significantly decrease our operating
expenses and overall cost structure. We also began reducing inventory in the second half of fiscal 2009 and have plans
for improved inventory management and lower capital expenditures and operating expenses in fiscal 2010 than in fiscal
2009. We believe our cost structure is now aligned with current market conditions and supports our plans to be
profitable and cash flow positive in fiscal 2010; however, we will monitor and realign our cost structure as needed to
match the actual economic conditions.
• Establish strong Unified Communications market position for future growth. We will continue to focus on Unified
Communications technologies as we believe the implementation of UC by large corporations will be a significant long-
term driver of office headset adoption, and as a result, a key long-term driver of revenue and profit growth.
• Improve return on invested capital. We are focused on increasing our profits and reducing our net assets with the goal
of improving our return on invested capital. Initiatives designed to reduce capital include the transition to an outsourced
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 leveraging the investments we have made in supply
chain management systems to reduce inventory and improve inventory turns.
We intend for the following discussion of our financial condition and results of operations to provide information that will assist in
understanding our financial statements and therefore, this discussion should be read in conjunction with the financial statements and
accompanying notes.