SANTA CRUZ, Calif., Feb. 05, 2019 (GLOBE NEWSWIRE) -- Plantronics, Inc. (NYSE: PLT) today announced third quarter results for the period ending December 31, 2018. On July 2, 2018, Plantronics completed the acquisition of Polycom, which is reflected in these results. Highlights of the third quarter include the following (in millions, except percent and per share data, comparisons are against Plantronics' third quarter Fiscal Year 2018):
GAAP | YoY Change | Non-GAAP1 | YoY Change | |||||||||
Revenue | $501.7 | +122% | Revenue | $530.6 | +134% | |||||||
GM% | 42.9% | -750 bps | GM% | 51.5% | +70 bps | |||||||
Op Inc $ | ($24.7) | -167% | Op Inc $ | $93.2 | +108% | |||||||
Diluted EPS | ($1.06) | -31% | Diluted EPS | $1.36 | +34% | |||||||
Op CF | $46.7 | +59% | EBITDA | $105.5 | +111% |
Performance Against November 6, 2018 Guidance
Q3 FY19 Actual Results | Performance | Q3 FY19 Guidance Range2 | ||
GAAP Net Revenue | $502M | Exceeded Midpoint | $481M - $511M | |
Non-GAAP Net Revenue | $531M | Exceeded Midpoint | $510M - $540M | |
Non-GAAP Operating Income | $93M | At High End | $79M - $94M | |
Non-GAAP Diluted EPS | $1.36 | Exceeded Range | $1.10 - $1.35 |
“We continue to make progress on our ongoing product roadmap, integration plans, and financial goals, meeting or exceeding our guidance targets, with operating income and EBITDA more than doubling as result of the acquisition,” said Joe Burton, President and Chief Executive Officer. “The launch of Polycom Studio, the first in a family of multi-media video solutions designed specifically for the Huddle Room, is just one example of how we are leveraging our innovative engineering and design to address specific customer needs in this fast-growing segment of the UC&C market.”
“We remain on track to deliver on our cost synergy targets and are pleased by the $45M of run-rate annualized cost synergies achieved to date as we continue to execute on our integration plans,” said Pam Strayer, Executive Vice President and Chief Financial Officer. “Revenue growth in desktop phones, audio conferencing, and headsets, coupled with expense reductions drove strong profitability for the third quarter.”
1For further information on supplemental non-GAAP metrics refer to the Use of Non-GAAP and Comparative Information and Unaudited Reconciliations GAAP Measures to Non-GAAP Measures sections below.
2Non-GAAP guidance ranges shown here have been adjusted to exclude the $28.9 million impact of purchase accounting related to recording deferred revenue at fair value at the time of the acquisition.
Highlights for the Third Quarter of Fiscal Year 2019
Plantronics Announces Quarterly Dividend of $0.15
The Plantronics Board of Directors has declared a quarterly cash dividend of $0.15 per common share, to be paid on March 8, 2019, to all shareholders of record as of the close of market on February 20, 2019.
Business Outlook
The following statements are based on the Company's current expectations, and many of these statements are forward-looking. Actual results are subject to a variety of risks and uncertainties and may differ materially from the Company's expectations.
Plantronics currently expects the following range of financial results for the fourth quarter of Fiscal Year 2019 (all amounts assuming currency rates remain stable):
With respect to Plantronics operating income and diluted EPS guidance, the Company has determined that it is unable to provide quantitative reconciliations of these forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measures with a reasonable degree of confidence in their accuracy without unreasonable effort, as items including stock based compensation, acquisition and integration costs, litigation gains and losses, and impacts from discrete tax adjustments and tax laws are inherently uncertain and depend on various factors, many of which are beyond the Company's control.
The Company's business is inherently difficult to forecast, particularly with continuing uncertainty in regional economic conditions, currency fluctuations, customer cancellations and rescheduling, and there can be no assurance that expectations of incoming orders over the balance of the current quarter will materialize.
Conference Call and Prepared Remarks
Plantronics is providing an earnings presentation in combination with its press release. The presentation is offered to provide shareholders and analysts with additional detail for analyzing results in advance of the quarterly conference call. The presentation will be available in the Investor Relations section of our corporate website at investor.plantronics.com along with this press release. A reconciliation of our GAAP to non-GAAP and historical combined comparative results is provided at the end of this press release.
We have scheduled a conference call to discuss third quarter of Fiscal Year 2019 financial results. The conference call will take place today, February 5, 2019, at 2:00 PM (Pacific Time). All interested investors and potential investors in Plantronics stock are invited to participate. To listen to the call, please dial in five to ten minutes prior to the scheduled starting time and refer to the “Plantronics Conference Call.” The dial-in from North America is (888) 301-8736 and the international dial-in is (706) 634-7260.
The conference call will also be simultaneously webcast and can be accessed from the Investor Relations section of our website. A replay of the call with the conference ID #55437194 will be available until April 4, 2019 at (855) 859-2056 for callers from North America and at (404) 537-3406 for all other callers.
Use of Non-GAAP and Combined Comparative Financial Information
To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP, and where applicable, combined comparative measures of operating results, including non-GAAP net revenues, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income and non-GAAP diluted EPS, which exclude certain unusual or non-cash expenses and charges that are included in the most directly comparable GAAP measure. These unusual or non-cash expenses and charges include the effect, where applicable, of purchase accounting on deferred revenue and inventory, stock-based compensation, acquisition related expenses, purchase accounting amortization and adjustments, restructuring and other related charges and credits, asset impairments, executive transition charges, and the impact of participating securities, all net of any associated tax impact. We also exclude tax benefits from the release of tax reserves, discrete tax adjustments including transfer pricing, tax deduction and tax credit adjustments, and the impact of tax law changes. We exclude these amounts from our non-GAAP and combined comparative measures primarily because management does not believe they are consistent with the development of our target operating model. Combined comparative results refer to the results for periods prior to the Plantronics and Polycom combination, which were prepared by combining the non-GAAP results of as if they had been combined during that period. These prior period results are presented on a non-GAAP as-reported basis, with immaterial adjustments to align the treatment of non-GAAP adjustments for comparative purposes. We believe that the use of non-GAAP and combined comparative financial measures provides meaningful supplemental information regarding our performance and liquidity and helps investors compare actual results with our historical and long-term target operating model goals as well as our performance as a combined company. We believe presenting non-GAAP net revenue provides meaningful supplemental information regarding how management views the performance of the business and underlying performance of our individual product categories. We believe that both management and investors benefit from referring to these non-GAAP and combined comparative financial measures in assessing our performance and when planning, forecasting and analyzing future periods; however, non-GAAP and combined comparative financial measures are not meant to be considered in isolation of, or as a substitute for, or superior to, net revenues, gross margin, operating expenses, operating income, operating margin, net income or EPS prepared in accordance with GAAP.
Safe Harbor
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to: (i) our expectations regarding our ability to successfully achieve anticipated integration synergies; (ii) our expectations for product announcements and releases; (iii) our estimates concerning debt reduction actions and timing; (iv) estimates of GAAP and non-GAAP financial results for the fourth quarter of Fiscal Year 2019, including net revenues, purchase accounting adjustments, operating income, tax rates, the impact of foreign exchange rates on revenues, and diluted weighted average shares outstanding and diluted EPS, in addition to other matters discussed in this press release that are not purely historical data. We do not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise.
Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by such statements. Among the factors that could cause actual results to differ materially from those contemplated are:
For more information concerning these and other possible risks, please refer to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 9, 2018 and other filings with the Securities and Exchange Commission, as well as recent press releases. The Securities and Exchange Commission filings can be accessed over the Internet at http://www.sec.gov/edgar/searchedgar/companysearch.html.
Financial Summaries
The following related charts are provided:
About Plantronics
Plantronics is an audio pioneer and a leader in the communications industry. Plantronics technology creates rich, natural, people-first audio and collaboration experiences so good ideas can be shared and heard-wherever, whenever and however they happen. The company’s portfolio of integrated communications and collaboration solutions spans headsets, software, desk phones, audio and video conferencing, analytics and services. Our solutions are used worldwide by consumers and businesses alike and are the leading choice for every kind of workspace. For more information visit plantronics.com.
Plantronics and Polycom are registered trademarks of Plantronics, Inc. The Bluetooth name and the Bluetooth trademarks are owned by Bluetooth SIG, Inc. and are used by Plantronics, Inc. under license. All other trademarks are the property of their respective owners.
PLANTRONICS, INC. / 345 Encinal Street / P.O. Box 1802 / Santa Cruz, California 95060
831-426-6060 / Fax 831-426-6098
PLANTRONICS, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||
Net Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net product revenues | $ | 226,534 | $ | 445,441 | $ | 640,760 | $ | 1,102,012 | ||||||||||||||||||||||||||||||||||||||||||
Net services revenues | — | 56,228 | — | 104,035 | ||||||||||||||||||||||||||||||||||||||||||||||
Total net revenues | 226,534 | 501,669 | 640,760 | 1,206,047 | ||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of product revenues | 112,409 | 259,673 | 315,720 | 676,616 | ||||||||||||||||||||||||||||||||||||||||||||||
Cost of service revenues | — | 26,859 | — | 51,822 | ||||||||||||||||||||||||||||||||||||||||||||||
Total cost of revenues | 112,409 | 286,532 | 315,720 | 728,438 | ||||||||||||||||||||||||||||||||||||||||||||||
Gross profit | 114,125 | 215,137 | 325,040 | 477,609 | ||||||||||||||||||||||||||||||||||||||||||||||
Gross profit % | 50.4 | % | 42.9 | % | 50.7 | % | 39.6 | % | ||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Research, development, and engineering | 21,257 | 59,661 | 62,402 | 140,409 | ||||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative | 56,196 | 168,053 | 170,125 | 406,553 | ||||||||||||||||||||||||||||||||||||||||||||||
(Gain) loss, net from litigation settlements | (15 | ) | — | (295 | ) | (30 | ) | |||||||||||||||||||||||||||||||||||||||||||
Restructuring and other related charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | |||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 77,354 | 239,844 | 234,670 | 567,643 | ||||||||||||||||||||||||||||||||||||||||||||||
Operating income | 36,771 | (24,707 | ) | 90,370 | (90,034 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Operating income % | 16.2 | % | (4.9 | )% | 14.1 | % | (7.5 | )% | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | (7,341 | ) | (25,032 | ) | (21,904 | ) | (56,252 | ) | ||||||||||||||||||||||||||||||||||||||||||
Other non-operating income, net | 2,490 | 125 | 5,230 | 3,731 | ||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 31,920 | (49,614 | ) | 73,696 | (142,555 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | 81,424 | (7,880 | ) | 84,419 | (28,583 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (49,504 | ) | $ | (41,734 | ) | $ | (10,723 | ) | $ | (113,971 | ) | ||||||||||||||||||||||||||||||||||||||
% of net revenues | (21.9 | )% | (8.3 | )% | (1.7 | )% | (9.4 | )% | ||||||||||||||||||||||||||||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | (1.54 | ) | $ | (1.06 | ) | $ | (0.33 | ) | $ | (3.08 | ) | ||||||||||||||||||||||||||||||||||||||
Diluted | $ | (1.54 | ) | $ | (1.06 | ) | $ | (0.33 | ) | $ | (3.08 | ) | ||||||||||||||||||||||||||||||||||||||
Shares used in computing earnings per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | 32,075 | 39,314 | 32,384 | 37,063 | ||||||||||||||||||||||||||||||||||||||||||||||
Diluted | 32,075 | 39,314 | 32,384 | 37,063 | ||||||||||||||||||||||||||||||||||||||||||||||
Effective tax rate | 255.1 | % | 15.9 | % | 114.6 | % | 20.1 | % |
PLANTRONICS, INC. | ||||||||||||||||||||||
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||
2018 | 2018 | |||||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Cash and cash equivalents | $ | 390,661 | $ | 328,156 | ||||||||||||||||||
Short-term investments | 269,313 | 13,422 | ||||||||||||||||||||
Total cash, cash equivalents, and short-term investments | 659,974 | 341,578 | ||||||||||||||||||||
Accounts receivable, net | 152,888 | 363,837 | ||||||||||||||||||||
Inventory, net | 68,276 | 160,219 | ||||||||||||||||||||
Other current assets | 18,588 | 48,229 | ||||||||||||||||||||
Total current assets | 899,726 | 913,863 | ||||||||||||||||||||
Property, plant, and equipment, net | 142,129 | 212,138 | ||||||||||||||||||||
Goodwill | 15,498 | 1,272,619 | ||||||||||||||||||||
Purchased intangibles, net | — | 871,599 | ||||||||||||||||||||
Deferred tax assets | 17,950 | 4,741 | ||||||||||||||||||||
Other assets | 1,584 | 22,821 | ||||||||||||||||||||
Total assets | $ | 1,076,887 | $ | 3,297,781 | ||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||
Accounts payable | $ | 45,417 | $ | 146,067 | ||||||||||||||||||
Accrued liabilities | 80,097 | 452,194 | ||||||||||||||||||||
Total current liabilities | 125,514 | 598,261 | ||||||||||||||||||||
Long-term debt, net of issuance costs | 492,509 | 1,727,660 | ||||||||||||||||||||
Long-term income taxes payable | 87,328 | 93,150 | ||||||||||||||||||||
Other long-term liabilities | 18,566 | 134,492 | ||||||||||||||||||||
Total liabilities | 723,917 | 2,553,563 | ||||||||||||||||||||
Stockholders' equity | 352,970 | 744,218 | ||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,076,887 | $ | 3,297,781 | ||||||||||||||||||
PLANTRONICS, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | $ | (49,504 | ) | $ | (41,734 | ) | $ | (10,723 | ) | $ | (113,971 | ) | ||||||||||||||||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 5,151 | 55,117 | 15,894 | 142,763 | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of debt issuance cost | 362 | 1,419 | 1,087 | 3,188 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 8,029 | 11,719 | 26,047 | 30,709 | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred income taxes | 6,106 | (21,931 | ) | 10,490 | (39,987 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Provision for excess and obsolete inventories | 1,113 | 2,073 | 2,013 | 4,881 | ||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | |||||||||||||||||||||||||||||||||||||||||||||
Cash payments for restructuring charges | (482 | ) | (3,827 | ) | (2,911 | ) | (11,222 | ) | ||||||||||||||||||||||||||||||||||||||||||
Other operating activities | 496 | 60 | (645 | ) | 9,070 | |||||||||||||||||||||||||||||||||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable, net | (4,399 | ) | (12,075 | ) | (3,153 | ) | (35,938 | ) | ||||||||||||||||||||||||||||||||||||||||||
Inventory, net | (3,733 | ) | (5,362 | ) | (9,577 | ) | 11,018 | |||||||||||||||||||||||||||||||||||||||||||
Current and other assets | 1,473 | 33,149 | (3,066 | ) | 30,456 | |||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | (422 | ) | (4,108 | ) | 2,783 | 16,519 | ||||||||||||||||||||||||||||||||||||||||||||
Accrued liabilities | (6,307 | ) | 33,172 | (15,695 | ) | 72,677 | ||||||||||||||||||||||||||||||||||||||||||||
Income taxes | 74,277 | (13,110 | ) | 66,387 | (21,631 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Cash provided by operating activities | $ | 32,076 | $ | 46,693 | $ | 81,369 | $ | 119,243 | ||||||||||||||||||||||||||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sale of investments | 23,516 | 1,159 | 54,411 | 125,799 | ||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from maturities of investments | 40,328 | — | 146,989 | 131,017 | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase of investments | (98,891 | ) | (162 | ) | (232,840 | ) | (698 | ) | ||||||||||||||||||||||||||||||||||||||||||
Acquisitions, net of cash acquired | — | 8,001 | — | (1,642,241 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Capital expenditures | (2,651 | ) | (8,613 | ) | (9,403 | ) | (16,148 | ) | ||||||||||||||||||||||||||||||||||||||||||
Cash provided by (used for) investing activities | $ | (37,698 | ) | $ | 385 | $ | (40,843 | ) | $ | (1,402,271 | ) | |||||||||||||||||||||||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (13,693 | ) | (4,780 | ) | (52,915 | ) | (4,780 | ) | ||||||||||||||||||||||||||||||||||||||||||
Employees' tax withheld and paid for restricted stock and restricted stock units | (397 | ) | (521 | ) | (11,186 | ) | (13,863 | ) | ||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuances under stock-based compensation plans | 1,496 | 53 | 13,446 | 14,925 | ||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from debt issuance, net | — | — | — | 1,244,713 | ||||||||||||||||||||||||||||||||||||||||||||||
Payment of cash dividends | (4,951 | ) | (5,971 | ) | (15,008 | ) | (16,953 | ) | ||||||||||||||||||||||||||||||||||||||||||
Cash provided by (used for) financing activities | $ | (17,545 | ) | $ | (11,219 | ) | $ | (65,663 | ) | $ | 1,224,042 | |||||||||||||||||||||||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 344 | 1,211 | 3,460 | (3,519 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net increase in cash and cash equivalents | (22,823 | ) | 37,070 | (21,677 | ) | (62,505 | ) | |||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents at beginning of period | 303,116 | 291,086 | 301,970 | 390,661 | ||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 280,293 | $ | 328,156 | $ | 280,293 | $ | 328,156 | ||||||||||||||||||||||||||||||||||||||||||
PLANTRONICS, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
GAAP Net Revenues | $ | 226,534 | $ | 501,669 | $ | 640,760 | $ | 1,206,047 | ||||||||||||||||||||||||||||||||||||||||
Deferred revenue purchase accounting | $ | — | $ | 28,923 | $ | — | $ | 65,508 | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP Net Revenues | $ | 226,534 | $ | 530,592 | $ | 640,760 | $ | 1,271,555 | ||||||||||||||||||||||||||||||||||||||||
GAAP Gross profit | $ | 114,125 | $ | 215,137 | $ | 325,040 | $ | 477,609 | ||||||||||||||||||||||||||||||||||||||||
Purchase accounting amortization | — | 27,575 | — | 83,243 | ||||||||||||||||||||||||||||||||||||||||||||
Inventory valuation adjustment | — | — | — | 30,395 | ||||||||||||||||||||||||||||||||||||||||||||
Deferred revenue purchase accounting | — | 28,923 | — | 65,508 | ||||||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | — | 404 | — | 621 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 917 | 1,067 | 2,709 | 3,103 | ||||||||||||||||||||||||||||||||||||||||||||
Other adjustments1 | — | — | 1,585 | — | ||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Gross profit | $ | 115,042 | $ | 273,106 | $ | 329,334 | $ | 660,479 | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP Gross profit % | 50.8 | % | 51.5 | % | 51.4 | % | 51.9 | % | ||||||||||||||||||||||||||||||||||||||||
GAAP Research, development, and engineering | $ | 21,257 | $ | 59,661 | $ | 62,402 | $ | 140,409 | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | (2,049 | ) | (2,887 | ) | (6,158 | ) | (7,877 | ) | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | — | (95 | ) | — | (151 | ) | ||||||||||||||||||||||||||||||||||||||||||
Purchase accounting amortization | — | (80 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Research, development, and engineering | $ | 19,208 | $ | 56,679 | $ | 56,164 | $ | 132,381 | ||||||||||||||||||||||||||||||||||||||||
GAAP Selling, general, and administrative | $ | 56,196 | $ | 168,053 | $ | 170,125 | $ | 406,553 | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | — | (21,775 | ) | — | (53,558 | ) | ||||||||||||||||||||||||||||||||||||||||||
Purchase accounting amortization | — | (15,278 | ) | — | (30,557 | ) | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | (5,063 | ) | (7,765 | ) | (17,180 | ) | (19,729 | ) | ||||||||||||||||||||||||||||||||||||||||
Other adjustments2 | — | — | (549 | ) | — | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Selling, general, and administrative | $ | 51,133 | $ | 123,235 | $ | 152,396 | $ | 302,709 | ||||||||||||||||||||||||||||||||||||||||
GAAP Operating expenses | $ | 77,354 | $ | 239,844 | $ | 234,670 | $ | 567,643 | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | — | (21,870 | ) | — | (53,709 | ) | ||||||||||||||||||||||||||||||||||||||||||
Purchase accounting amortization | — | (15,278 | ) | (80 | ) | (30,557 | ) | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | (7,112 | ) | (10,652 | ) | (23,338 | ) | (27,606 | ) | ||||||||||||||||||||||||||||||||||||||||
Restructuring and other related (charges) credits | 84 | (12,130 | ) | (2,438 | ) | (20,711 | ) | |||||||||||||||||||||||||||||||||||||||||
Other adjustments | — | — | (549 | ) | — | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Operating expenses | $ | 70,326 | $ | 179,914 | $ | 208,265 | $ | 435,060 | ||||||||||||||||||||||||||||||||||||||||
1 | Includes immaterial adjustments for loss on sale of assets and write off of indirect tax assets. |
2 | Includes immaterial adjustments for executive transition costs. |
PLANTRONICS, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (CONTINUED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP Operating income | $ | 36,771 | $ | (24,707 | ) | $ | 90,370 | $ | (90,034 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase accounting amortization | — | 42,853 | 80 | 113,800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory valuation adjustment | — | — | — | 30,395 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred revenue purchase accounting | — | 28,923 | — | 65,508 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | — | 22,274 | — | 54,330 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 8,029 | 11,719 | 26,047 | 30,709 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other related charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other adjustments | — | — | 2,134 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Operating income | $ | 44,716 | $ | 93,192 | $ | 121,069 | $ | 225,419 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP Net income | $ | (49,504 | ) | $ | (41,734 | ) | $ | (10,723 | ) | $ | (113,971 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase accounting amortization | — | 42,853 | 80 | 113,800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory valuation adjustment | — | — | — | 30,395 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred revenue purchase accounting | — | 28,923 | — | 65,508 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | — | 22,274 | — | 54,330 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 8,029 | 11,719 | 26,047 | 30,709 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other related charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other adjustments | — | — | 2,134 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax effect of above items | 2,067 | (18,036 | ) | (6,444 | ) | (56,934 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax effect of unusual tax items | 72,599 | (1 | ) | (4,028 | ) | (2 | ) | 68,938 | (3 | ) | (5,387 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Net income | $ | 33,107 | $ | 54,101 | $ | 82,470 | $ | 139,160 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP Diluted earnings per common share | $ | (1.54 | ) | $ | (1.06 | ) | $ | (0.33 | ) | $ | (3.08 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase accounting amortization | — | 1.08 | — | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory valuation adjustment | — | — | — | 0.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred revenue purchase accounting | — | 0.73 | — | 1.73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 0.25 | 0.30 | 0.79 | 0.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | — | 0.56 | — | 1.44 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other related charges (credits) | — | 0.31 | 0.07 | 0.55 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other adjustments | — | — | 0.07 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax effect | 2.29 | (0.57 | ) | 1.90 | (1.65 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of anti-dilutive securities | 0.02 | 0.01 | — | 0.07 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Diluted earnings per common share | $ | 1.02 | $ | 1.36 | $ | 2.50 | $ | 3.68 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares used in diluted earnings per common share calculation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP | 32,075 | 39,314 | 32,384 | 37,063 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
non-GAAP | 32,496 | 39,712 | 32,945 | 37,819 |
1 | Excluded amounts represent $74.6 million due to change in tax law, and the release of tax reserves. |
2 | Excluded amounts represent tax benefits resulting from the release of tax reserves and tax return true-ups. |
3 | Excluded amounts represent $74.6 million due to change in tax law, tax benefits resulting from the correction of an immaterial error in the first quarter and the release of tax reserves. |
PLANTRONICS, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP COMBINED COMPARATIVE MEASURES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
20181 | 20181 | 2018 | 2018 | 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plantronics GAAP operating income | $ | 33,131 | $ | 20,649 | $ | (85,976 | ) | $ | (24,707 | ) | (56,903 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Polycom GAAP Operating income2 | 19,095 | 12,246 | N/A | N/A | 31,341 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Combined comparative operating income before adjustments | 52,226 | 32,895 | (85,976 | ) | (24,707 | ) | (25,562 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred revenue purchase accounting | — | — | 36,585 | 28,923 | 65,508 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory valuation adjustment | — | — | 30,395 | — | 30,395 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition and integration fees | 10,660 | 12,901 | 26,253 | 22,274 | 72,088 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 7,912 | 8,150 | 10,840 | 11,719 | 38,621 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other related charges | 179 | 2,847 | 7,261 | 12,130 | 22,417 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-recurring legal-related and other matters3 | 603 | 609 | — | — | 1,212 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 29,259 | 29,233 | 82,398 | 55,117 | 196,007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 100,839 | $ | 86,635 | $ | 107,756 | $ | 105,456 | $ | 400,686 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | Polycom results shown in these periods are prior to the close of the acquisition on July 2, 2018. These results are shown here to arrive at combined comparative historical results. |
2 | Prepared in accordance with U.S. GAAP and Polycom's significant accounting policies as noted in Footnote 1. Basis of Presentation and Footnote 2. Summary of Significant Accounting Policies of exhibit 99.2 in form 8-K/A filed by Plantronics on August, 31, 2018. |
3 | Includes immaterial adjustments to conform historical Polycom results to Plantronics non-GAAP policy. |
PLANTRONICS, INC. | |||||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP COMBINED COMPARATIVE MEASURES | |||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA | |||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||
December 31, | March 31, | ||||||||||||||||||||
2017 | 2018 | ||||||||||||||||||||
Enterprise Headsets | $ | 167,640 | $ | 164,587 | |||||||||||||||||
Consumer Headsets | 58,894 | 51,556 | |||||||||||||||||||
Voice1 | 105,510 | 110,590 | |||||||||||||||||||
Video1 | 104,190 | 81,730 | |||||||||||||||||||
Services1 | 81,820 | 78,920 | |||||||||||||||||||
Combined comparative net revenues | $ | 518,054 | $ | 487,383 | |||||||||||||||||
Plantronics GAAP Gross profit | $ | 114,125 | $ | 114,075 | |||||||||||||||||
Polycom GAAP gross profit2 | 160,730 | 158,569 | |||||||||||||||||||
Combined comparative gross profit before adjustments | $ | 274,855 | $ | 272,644 | |||||||||||||||||
Stock-based compensation | 917 | 913 | |||||||||||||||||||
Purchase accounting amortization | — | 338 | |||||||||||||||||||
Combined comparative adjusted gross profit | $ | 275,772 | $ | 273,895 | |||||||||||||||||
Combined comparative adjusted gross profit % | 53.2 | % | 56.2 | % | |||||||||||||||||
Plantronics GAAP Operating income | $ | 36,771 | $ | 33,131 | |||||||||||||||||
Polycom GAAP Operating income2 | (26,304 | ) | 19,095 | ||||||||||||||||||
Combined comparative operating income before adjustments | $ | 10,467 | $ | 52,226 | |||||||||||||||||
Amortization of Polycom Goodwill and intangibles | 56,021 | 14,774 | |||||||||||||||||||
Stock-based compensation | 8,029 | 7,912 | |||||||||||||||||||
Acquisition and integration fees | 2,783 | 10,660 | |||||||||||||||||||
Restructuring and other related (charges) credits | 2,974 | 179 | |||||||||||||||||||
Non-recurring legal-related and other matters3 | 977 | 603 | |||||||||||||||||||
Combined adjusted operating income | $ | 81,251 | $ | 86,354 | |||||||||||||||||
Combined adjusted operating profit % | 15.7 | % | 17.7 | % |
1 | Categories were introduced with the acquisition of Polycom on July 2, 2018. Historical Polycom revenues are shown here to arrive at combined comparative historical net revenues. |
2 | Prepared in accordance with U.S. GAAP and Polycom's significant accounting policies as noted in Footnote 1. Basis of Presentation and Footnote 2. Summary of Significant Accounting Policies of exhibit 99.2 in form 8-K/A filed by Plantronics on August, 31, 2018. |
3 | Includes immaterial adjustments to conform historical Polycom results to Plantronics non-GAAP policy. |
INVESTOR CONTACT: Mike Iburg Vice President, Investor Relations (831) 458-7533 | MEDIA CONTACT: Shannon Shamoon Manager, Marketing Buzz and Brand (831) 201-9142 |