Plantronics 2012 Annual Report Download

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Simply Smarter Communications™
Annual Report 2012

Table of contents

  • Page 1
    Annual Report 2012 Simply Smarter Communicationsâ„¢

  • Page 2
    ... 2010 2011 2012 Fiscal Year 2008 2009 2010 2011 2012 Other Financial Data In millions Years Ended Cash provided from operating activities Total assets Total stockholders' equity Total shares repurchased Total cash utilized for stock repurchases Shares used in diluted earnings per share...

  • Page 3
    ...® headsef 1983 Sally Ride uses Planfronics headsef in space 2000 Digitally enhanced USB headseafs for fhe PC and Mac compufers are infroduced 2010 Savi® Office wireless headsef sysfem unifies PC and desk phone communicafions 2012 Planfronics launches a developer community fo focus on delivering...

  • Page 4
    ...™ series for desktop phones represented an important evolution in our office solutions. We expanded our UC portfolio with additions to our Savi®, Blackwire®, and Calisto® lines. On the consumer side, we added new Mobile Bluetooth® products such as the Voyager® PRO HD, Marque M155™, and M50...

  • Page 5
    ... 345 Encinal Street, Santa Cruz, California (Address of principal executive offices) 77-0207692 (I.R.S. Employer Identification Number) 95060 (Zip Code) The aggregate market value of the common stock held by non-affiliates of the Registrant, based upon the closing price of $28.45 for shares of the...

  • Page 6
    ...70 countries through a worldwide network of distributors, retailers, wireless carriers, original equipment manufacturers ("OEMs") and telephony service providers. We have well-developed distribution channels in North America, Europe, Australia and New Zealand, where use of our products is widespread...

  • Page 7
    ...mandating hands-free devices for telephonic communications while driving has led to increased headset adoption for mobile phone users. The increased adoption of new and existing technologies, such as UC, Bluetooth, Voice over Internet Protocol ("VoIP"), Digital Signal Processing ("DSP"), and Digital...

  • Page 8
    ... features, sound quality, simplicity, price and reliability; maintenance of our brand name recognition and reputation; superior customer service, support and warranty terms; and effective and efficient distribution channels that allow us to market and sell our products. The contact center market is...

  • Page 9
    ... following locations Tijuana, Mexico, which provides logistics services for products destined for customers in the U.S., Canada, Asia Pacific, and Latin America regions; Prague, Czech Republic, which provides logistics services for products shipped to customers in our Europe, Middle East and Africa...

  • Page 10
    ... Chief Technology Officer Senior Vice President, Sales Chief Strategy Officer Senior Vice President, Marketing and Chief Marketing Officer Senior Vice President, Communication Solutions President, Clarity Division Managing Director, Europe, Middle East & Africa Senior Vice President, Human Resources...

  • Page 11
    ... Plantronics in 1996 as Vice President of Sales and was promoted to Senior Vice President of Sales in 1998. From 1995 through 1996, Mr. Houston served as Vice President of Worldwide Sales for Proxima Corporation, a designer, developer, manufacturer, and marketer of multi-media projection products...

  • Page 12
    ... in Europe, whether short-term or prolonged, could result in reductions in sales of our products, longer sales cycles, slower adoption of new technologies, increased price competition and customer and supplier bankruptcies. Financial institutions continue to experience significant market pressure...

  • Page 13
    ...quickly to changes in demand, potentially resulting in either excess inventories of such goods or materials, sub-assemblies, components and product shortages. Lead times are particularly long on siliconbased components incorporating radio frequency and digital signal processing technologies and such...

  • Page 14
    ... 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 including products that are modeled on or are direct copies of our products. These new...

  • Page 15
    ... subjects our business to risks of international operations. We have a manufacturing facility in Tijuana, Mexico. We also have suppliers and other vendors throughout Asia, including GoerTek, Inc. located in Weifang, China, which is the manufacturer of the majority of our Bluetooth products. We also...

  • Page 16
    ... have tested our headsets through independent laboratories and have found that use of our corded headsets reduces radio frequency emissions at the user's head to virtually zero and our Bluetooth and other wireless headsets emit significantly less powerful radio frequency emissions than mobile phones...

  • Page 17
    ...more of our executive officers or other key employees; changes in earnings estimates or recommendations by securities analysts; developments in our industry; sales of substantial numbers of shares of our common stock in the public market; general economic, political, and market conditions, including...

  • Page 18
    ... stock. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES Our principal 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, 2012: Location...

  • Page 19
    ...SECURITIES Price Range of Common Stock Our common stock is publicly traded on the New York Stock Exchange ("NYSE") under the symbol "PLT". The following table sets forth the low and high sales prices as reported on the NYSE for each period indicated. Low Fiscal Year 2012 First Quarter Second Quarter...

  • Page 20
    .... Includes 3,686 shares tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans. ITEM 6. SELECTED FINANCIAL DATA SELECTED FINANCIAL DATA The information set forth below is not necessarily indicative of results of...

  • Page 21
    ...lightweight communications headsets, telephone headset systems, and accessories for the worldwide business and consumer markets under the Plantronics brand. In addition, we manufacture and market, under our Clarity brand, specialty telephone products, such as telephones for the hearing impaired, and...

  • Page 22
    ...in fiscal year 2011 compared to fiscal year 2010 primarily in our OCC product category as a result of growth in demand for UC, offset partly by weakness in the Bluetooth market and loss of market share which resulted in a decrease in our Mobile product revenues. While we experienced foreign exchange...

  • Page 23
    ... in UC. Selling, General and Administrative Selling, general and administrative expense consists primarily of compensation costs, marketing costs, travel expenses, expensed equipment, professional service fees, and allocations of overhead expenses, including IT, facilities, and human resources costs...

  • Page 24
    ...sell Altec Lansing, our AEG segment. The sale was completed effective December 1, 2009. All of the revenues in the AEG segment were derived from sales of Altec Lansing products. All operations of AEG have been classified as discontinued... stimulus program in Mexico in fiscal year 2010 that did...

  • Page 25
    ... sale of Altec Lansing, our AEG segment. Capital expenditures during fiscal year 2011 related primarily to building and leasehold improvements, including the installation of an expanded solar energy system in our headquarters in Santa Cruz, California, tooling and various IT projects and equipment...

  • Page 26
    ... of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans. As of March 31, 2012, there were a total of 633,613 remaining shares authorized for repurchase, all of which are under our program approved by the Board of Directors on March 8, 2012. Refer...

  • Page 27
    ... customer sales returns include the general timing of historical returns and estimated return rates. The allowance for sales incentive programs is based on historical experience and contractual terms in the form of lump sum payments or sell-through credits. Future market conditions and product...

  • Page 28
    ...the case, the entity is required to perform a more detailed two-step goodwill impairment test that is used to identify potential goodwill impairment and to measure the amount of goodwill impairment losses, if any, to be recognized. We adopted ASU 2011-08 in the fourth quarter of fiscal year 2012 and...

  • Page 29
    ..., on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan...

  • Page 30
    ...stock, $0.01 par value per share; 1,000 shares authorized, no shares outstanding PLANTRONICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Fiscal Year Ended March 31, 2012 2011 2010...: Research, development and engineering Selling, general and administrative Gain...

  • Page 31
    ... of long-term investments Capital expenditures and other assets Proceeds from sale of property, plant and equipment and assets held for sale Proceeds received from sale of AEG segment Cash (used for) provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repurchase of common stock...

  • Page 32
    ... marketer of lightweight communications headsets, telephone headset systems, and accessories for the business and consumer markets under the Plantronics brand. In addition, the Company manufactures and markets, under the Clarity brand, specialty products, such as telephones for the hearing impaired...

  • Page 33
    ... on proprietary valuation models that are prepared by the independent pricing services and use algorithms based on inputs such as observable market data, quoted market prices for similar securities, issuer spreads and internal assumptions of the broker. The Company corroborates the reasonableness...

  • Page 34
    ... was engaged in the design, manufacture, sales and marketing of audio solutions and related technologies. All of the revenues in the AEG segment were derived from the sale of Altec Lansing products. All operations of AEG have been classified as discontinued operations in the Consolidated statement...

  • Page 35
    Table of Contents Table of Contents The Company recognized a pre-tax loss on the sale of Altec Lansing in fiscal year 2010, calculated as follows (in thousands): Proceeds received upon close Escrow payments received to date Remaining escrow payments to be received (subsequently received in fiscal ...

  • Page 36
    ... million as of March 31, 2012 and 2011 and there were no changes in the carrying value during the fiscal years then ended. In fiscal years 2012 and 2011, for purposes of the annual goodwill impairment test, the Company determined there to be no reporting units below its operating segment; therefore...

  • Page 37
    ... the revised estimate of the asset's useful life. During the second quarter of fiscal year 2010, management entered into a non-binding letter of intent to sell Altec Lansing, the Company's AEG segment. The Company concluded that this triggered an interim impairment review as it was now more likely...

  • Page 38
    ... sells substantially all of its products to end users through distributors, retailers, OEMs, and telephony service providers (collectively "customers"). As is customary in the Company's industry and as provided for in local law in the U.S. and other jurisdictions, Plantronics' standard contracts...

  • Page 39
    ...The expected stock price volatility for the years ended March 31, 2012, 2011 and 2010 was determined based on an equally weighted average of historical and implied volatility. Implied volatility is based on the volatility of the Company's publicly traded options on its common stock with terms of six...

  • Page 40
    ....0 million and an average price per share of $33.42 based on the VWAP of the Company's common stock during the term of the agreement, less a discount. Open Market Repurchases Under the Board authorized programs, during the years ended March 31, 2012, 2011 and 2010, the Company repurchased 3,699,517...

  • Page 41
    ... of operations immediately. On a monthly basis, the Company enters into option contracts with a one-year term. It does not purchase options for trading purposes. As of March 31, 2012, the Company had foreign currency put and call option contracts of approximately â,¬63.7 million and £20.0 million...

  • Page 42
    ... operations because it generates sufficient domestic operating cash flow and has access to external funding under its line of credit. As a result, the Company does not expect a material impact on its business or financial flexibility with respect to undistributed earnings of its foreign operations...

  • Page 43
    ... include "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 personal computer ("PC") and...

  • Page 44
    ..., 2010 2010 (in thousands, except per share data) $ 181,585 $ 158,255 $ 95,808 $ 85,959 $ 31,552 $ 25,429 $ 0.66 $ 0.54 $ 0.64 $ 0.52 $ 0.05 $ 0.05 (in thousands) Net revenues from unaffiliated customers: U.S. Europe, Middle East and Africa Asia Pacific Americas, excluding U.S. Total International...

  • Page 45
    ... on the Plantronics' corporate website under the Corporate Governance section of the Company portal (www.plantronics.com). We intend to disclose future amendments to the Code, or any waivers of such provisions granted to executive officers and directors, on this web site within four business days...

  • Page 46
    ... information and Report of Independent Registered Public Accounting Firm are included in Part II of this Report. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSOLIDATED BALANCE SHEETS AT MARCH 31, 2011 AND 2010 CONSOLIDATED STATEMENTS...

  • Page 47
    ... 5,274 1,399 Deductions include the following amounts assumed by the purchaser as part of the sale of Altec Lansing on December 1, 2009: Provision for returns Provision for promotions, rebates and other Warranty reserves $ $ $ (1,440) (3,284) (383) All other schedules have been omitted because the...

  • Page 48
    ... located in Tijuana, Mexico (translation from Spanish original) Form File No. Exhibit Filing Date Filed Herewith May 25, 2012 PLANTRONICS, INC. 2.1.1 10-Q 001-12696 2.1 1/27/2010 By: Name: Title: /s/ Ken Kannappan Ken Kannappan Chief Executive Officer 2.1.2 10-Q 001-12696 2.1.1 1/27/2010...

  • Page 49
    .... Contract for the Transfer of Factory Building and the Land-Use Right, Dated July 23, 2010 Subsidiaries of the Registrant Consent of Independent Registered Public Accounting Firm Power of Attorney - Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10...

  • Page 50
    ...both (a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant to Company-sponsored plans. (d) "Board" means the Board of Directors of the Company. (e) "Change of Control" means: (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act of 1934, as...

  • Page 51
    ... net assets, return on total assets, return on capital, return on investment, return on sales, net or gross sales, market share, economic value added, cost of capital, change in assets, technical development, expense reduction levels, debt reduction, productivity, new product introductions, delivery...

  • Page 52
    ... Period, the Award shall be paid to his or her estate. 5. Term of Plan. The Plan shall first apply to the 2012 Plan Year and all subsequent Plan Years, unless it is not approved at the 2011 annual meeting of the Company's stockholders, in which case it shall terminate. Once approved by the...

  • Page 53
    ... fiscal year if Plantronics meets or exceeds the Annual Corporate Financial Performance threshold. The purpose of the Plantronics, Inc. Executive Incentive Plan ("EIP" or the "Plan") is to focus participants on achieving company-wide financial performance goals as well as product group, segment, or...

  • Page 54
    ...20 Plantronics India Private Limited Plantronics Pty. Limited Plantronics Telecommunicacoes Ltda. Plantronics Canada Inc. Plantronics International Ltd. Plantronics Communications Technology (Suzhou) Co., Ltd. Plantronics Trading (Suzhou) Co., Ltd Plantronics France SARL Plantronics GmbH Plantronics...

  • Page 55
    ... report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: May 25, 2012 /s/ Ken Kannappan Ken Kannappan President and Chief Executive Officer

  • Page 56
    ...Securities Exchange Act of 1934 and that information contained in the Annual Report on Form 10-K fairly presents in all material respects the financial condition and results of operations of Plantronics, Inc. By: Name: Title: Date: /s/ Ken Kannappan Ken Kannappan Chief Executive Officer May 25, 2012...

  • Page 57
    ...Solutions President, Clarity Managing Director, Europe, Middle East and Africa Senior Vice President, Human Resources Senior Vice President, Worldwide Operations Plantronics, Inc. NASDAQ/NYSE Amex/NYSE (US Companies) Index NASDAQ/NYSE Amex/NYSE Stocks (SIC3660-3669 US Comp) Communications Equipment...

  • Page 58
    ... for businesses and consumers. In addition, we manufacture and market, under our Clarity brand, specialty communications products for the hearing impaired. Our products are used by every company in the Fortune 100, as well as 911 dispatch, U.S. air traffic control and the New York Stock Exchange...

  • Page 59
    ©2012 Plantronics, Inc. All rights reserved.