Plantronics 2014 Annual Report Download - page 33

21
Our business could be materially adversely affected if we lose the benefit of the services of key personnel.
Our success depends to a large extent upon the services of a limited number of executive officers and other key employees. The
unanticipated loss of the services of one or more of our executive officers or key employees could have a material adverse effect
upon our business, financial condition, and results of operations. We also believe that our future success will depend in large part
upon our ability to attract and retain additional highly skilled technical, management, sales, and marketing personnel. Competition
for such personnel is intense. We may not be successful in attracting and retaining such personnel, and our failure to do so could
have a material adverse effect on our business, operating results, or financial condition.
We are subject to environmental laws and regulations that expose us to a number of risks and could result in significant
liabilities and costs.
There are multiple initiatives in several jurisdictions regarding the removal of certain potential environmentally sensitive materials
from our products to comply with the European Union (“EU”) and other Directives on the Restrictions of the use of Certain
Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) and on Waste Electrical and Electronic Equipment
(“WEEE”). If it is determined that our products do not comply with RoHs or WEEE, or additional new or existing environmental
laws or regulations in the U.S., Europe, or other jurisdictions are enacted or amended, we may be required to modify some or all
of our products or replace one or more components in those products, which, if such modifications are possible, may be time-
consuming, expensive to implement and decrease end-user demand, particularly if we increase prices to offset higher costs. If
any of the foregoing were to happen, our ability to sell one or more of our products may be limited or prohibited causing a material
negative effect on our financial results.
We are subject to various federal, state, local, and foreign environmental laws and regulations on a global basis, including those
governing the use, discharge, and disposal of hazardous substances in the ordinary course of our manufacturing process. Although
we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and
regulations, it is possible that future environmental legislation may be enacted or current environmental legislation may be
interpreted in any given country to create environmental liability with respect to our facilities, operations, or products. To the
extent that we incur claims for environmental matters exceeding reserves or insurance for environmental liability, our operating
results could be negatively impacted.
We have $16.2 million of goodwill and other intangible assets recorded on our balance sheet. If the carrying value of our
goodwill were to exceed its implied fair value, or if the carrying value of intangible assets were not recoverable, an impairment
loss may be recognized, which would adversely affect our financial results.
As a result of past acquisitions we have $16.2 million of goodwill and other intangible assets on our consolidated balance sheet
as of March 31, 2014. It is impossible at this time to determine if any future impairment charge would result or, if it does, whether
such charge related to these assets would be material. If such a charge is necessary, it may have a material adverse effect our
financial results.
If we are unable to protect our information systems against service interruption, misappropriation of data or breaches of
security, our operations could be disrupted, our reputation may be damaged, and we may be financially liable for damages.
We rely on networks, information systems, and other technology (“information systems”), including the Internet and third-party
hosted services, to support a variety of business activities, including procurement, manufacturing, sales, distribution, invoicing,
and collections. We use information systems to process and report financial information internally and to comply with regulatory
reporting. In addition, we depend on information systems for communications with our suppliers, distributors, and customers.
Consequently, our business may be impacted by system shutdowns or service disruptions during routine operations, such as system
upgrades or user errors, as well as network or hardware failures, malicious software, hackers, natural disasters, communications
interruptions, or other events (collectively, "network incidents"). Our computer systems have been, and will likely continue to be,
subject to network incidents. While, to date, we have not experienced a network incident resulting in material impairment to our
operations, nor have we experienced material intentional or inadvertent disclosure of our data or information or the information
or data of our customers or vendors, future network incidents could result in unintended disruption of our operations or disclosure
of sensitive information or assets. Furthermore, we may experience targeted attacks and although we continue to invest in personnel,
technologies, and training to prepare for and reduce the adverse consequences of such attacks, these investments are expensive
and do not guarantee that such attacks will be unsuccessful, either completely or partially.