Plantronics 2012 Annual Report Download - page 22

3332
Net Revenues
Fiscal Year Ended Fiscal Year Ended
(in thousands)
March 31,
2012
March 31,
2011 Increase (Decrease)
March 31,
2011
March 31,
2010 Increase (Decrease)
Net revenues:
Office and Contact
Center $ 531,709 $ 490,472 $ 41,237 8.4 % $ 490,472 $ 404,397 $ 86,075 21.3 %
Mobile 131,825 137,530 (5,705) (4.1)% 137,530 149,756 (12,226) (8.2)%
Gaming and
Computer Audio 31,855 36,736 (4,881) (13.3)% 36,736 39,260 (2,524) (6.4)%
Clarity 17,979 18,864 (885) (4.7)% 18,864 20,424 (1,560) (7.6)%
Total net revenues $ 713,368 $ 683,602 $ 29,766 4.4 % $ 683,602 $ 613,837 $ 69,765 11.4 %
OCC products represent our largest source of revenues, while Mobile products represent our largest unit volumes. Net revenues
may vary due to seasonality, the timing of new product introductions and discontinuation of existing products, discounts and other
incentives, and channel mix. Net revenues derived from sales of consumer goods into the retail channel typically account for a
seasonal increase in our net revenues in the third quarter of our fiscal year.
Our consolidated net revenues increased in fiscal year 2012 compared to fiscal year 2011 driven by growth in OCC product
revenues as a result of growth in demand for UC. In addition, favorable foreign exchange fluctuations in the Euro ("EUR") and
Great Britain Pound ("GBP") contributed approximately $4.0 million to the growth in our net revenues.
Our consolidated net revenues increased 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 fluctuations in our net revenues during
the first half of both fiscal years 2011 and 2010, the overall foreign exchange impact for each of the fiscal years was not material.
Fluctuations in net revenues in fiscal year 2012 compared to fiscal year 2011 resulted primarily from the following:
• $41.2 million increase in OCC net revenues as a result of higher volumes due to growth in demand for UC products;
• $5.7 million decrease in Mobile net revenues due mostly to overall weakness in the product category, which resulted in
a lower unit volume of sales. We also believe our share of the total global market decreased, with reductions in U.S.
market share offset partially by gains achieved internationally; and,
• $4.9 million decrease in Gaming and Computer Audio net revenues due primarily to market share loss as a result of
decreased investment in this category over the last two years as we have prioritized our investments in UC products and
development. We are currently planning to increase our investments in this area to enable future growth.
Fluctuations in net revenues in fiscal year 2011 compared to fiscal year 2010 resulted primarily from the following:
• $86.1 million increase in OCC net revenues as a result of higher volumes due to improved global economic conditions
and growth in demand for UC products; and,
• $12.2 million decrease in Mobile net revenues due primarily to overall weakness in the product category, which resulted
in a lower unit volume of sales.
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Geographical Information
Fiscal Year Ended Fiscal Year Ended
(in thousands)
March 31,
2012
March 31,
2011 Increase (Decrease)
March 31,
2011
March 31,
2010 Increase (Decrease)
Net revenues:
United States $ 406,233 $ 400,292 $ 5,941 1.5% $ 400,292 $ 378,119 $ 22,173 5.9%
As a percentage of net
revenues 56.9% 58.6% (1.7) ppt. 58.6% 61.6% (3.0) ppt.
Europe, Middle East and
Africa 181,761 169,521 12,240 7.2% 169,521 148,070 21,451 14.5%
Asia Pacific 74,249 62,697 11,552 18.4% 62,697 46,494 16,203 34.8%
Americas, excluding
United States 51,125 51,092 33 0.1% 51,092 41,154 9,938 24.1%
Total international net
revenues 307,135 283,310 23,825 8.4% 283,310 235,718 47,592 20.2%
As a percentage of net
revenues 43.1% 41.4% 1.7 ppt. 41.4% 38.4% 3.0 ppt.
Total consolidated net
revenues $ 713,368 $ 683,602 $ 29,766 4.4% $ 683,602 $ 613,837 $ 69,765 11.4%
As a percentage of total net revenues, consolidated U.S. net revenues decreased by 1.7 percentage points to 57% in fiscal year
2012 from 59% in fiscal year 2011 due mostly to strong international growth in OCC net revenues and by weakness in the Mobile
product category in the U.S. As a percentage of total net revenues, consolidated international net revenues increased to 43% in
fiscal year 2012 from 41% in fiscal year 2011. The increase in absolute dollars in U.S. net revenues resulted from increased OCC
net revenues due to growth in demand for UC. The increase in absolute dollars in international revenues was also due to increased
OCC net revenues along with an increase in Mobile net revenues as we gained market share in markets outside the U.S.
As a percentage of total net revenues, consolidated U.S. net revenues decreased by 3.0 percentage points to 59% in fiscal year
2011 from 62% in fiscal year 2010 due mostly to weakness in the Mobile product category in the U.S. As a percentage of total
net revenues, consolidated international net revenues increased to 41% in fiscal year 2011 from 38% in fiscal year 2010. The
increase in absolute dollars in U.S. net revenues was a result of increased OCC net revenues due to growth in demand for UC.
The increase in absolute dollars in international net revenues was also due to increased OCC net revenues along with an increase
in Mobile net revenues from market share gains in markets outside the U.S.
Cost of Revenues and Gross Profit
Cost of revenues consists primarily of direct manufacturing and contract manufacturer costs, warranty expense, freight expense,
depreciation, duty expense, reserves for excess and obsolete inventory, royalties, and an allocation of overhead expenses, including
IT and facilities costs.
Fiscal Year Ended Fiscal Year Ended
(in thousands)
March 31,
2012
March 31,
2011
Increase
(Decrease)
March 31,
2011
March 31,
2010
Increase
(Decrease)
Net revenues $ 713,368 $ 683,602 $ 29,766 4.4% $ 683,602 $ 613,837 $ 69,765 11.4%
Cost of revenues 329,017 321,846 7,171 2.2% 321,846 312,767 9,079 2.9%
Gross profit $ 384,351 $ 361,756 $ 22,595 6.2% $ 361,756 $ 301,070 $ 60,686 20.2%
Gross profit % 53.9% 52.9% 1.0 ppt. 52.9% 49.0% 3.9 ppt.
The increase in gross profit in fiscal year 2012 compared to fiscal year 2011 was due primarily to increased net revenues of $29.8
million along with operational efficiencies. As a percentage of net revenues, gross profit increased due primarily to operational
efficiencies such as lower freight and logistics costs and the benefits from a weaker U.S. dollar, offset partially by the net effect
of unfavorable component sourcing costs, slightly higher warranty obligations and reserves for excess and obsolete inventory.
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