-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V+8515Xerz+8HZ1pC4K2NKssRtgkPIZiH3lAULN1VBVtPWokirxmN9lICQ2TMoLy JvGU2f34jScNZQBbWjKfTA== 0000891618-96-002655.txt : 19961113 0000891618-96-002655.hdr.sgml : 19961113 ACCESSION NUMBER: 0000891618-96-002655 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961112 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLANTRONICS INC /CA/ CENTRAL INDEX KEY: 0000914025 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 770207692 STATE OF INCORPORATION: DE FISCAL YEAR END: 0327 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12696 FILM NUMBER: 96659382 BUSINESS ADDRESS: STREET 1: 337 ENCINAL ST STREET 2: PO BOX 1802 CITY: SANTA CRUZ STATE: CA ZIP: 95061-1802 BUSINESS PHONE: 4084266060 MAIL ADDRESS: STREET 1: 337 ENCINAL STREET P O BOX 1802 CITY: SAANTA CRUZ STATE: CA ZIP: 95061-1802 FORMER COMPANY: FORMER CONFORMED NAME: PI PARENT CORP DATE OF NAME CHANGE: 19931025 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------- FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 28, 1996 or ------------------------ [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ---------------------- ---------------------- Commission File Number 1-12696 PLANTRONICS, INC. ---------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 77-0207692 - ------------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 337 Encinal Street, P.O. Box 1802 Santa Cruz, California 95061-1802 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 426-6060 - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at September 28, 1996 ------------------------------- -------------------------------------- Common Stock, $.01 par value 8,147,335 Exhibit Index on Page 12 of 13 Page 1 of 13 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PLANTRONICS, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (IN THOUSANDS, EXCEPT SHARE DATA)
SEPTEMBER 30, MARCH 31, 1996 1996 ============= ========= ASSETS Current assets: Cash and cash equivalents $ 25,670 $ 26,787 Accounts receivable 38,002 38,555 Inventory 19,847 18,007 Deferred income taxes 5,094 5,094 Other current assets 815 1,227 --------- --------- Total current assets 89,428 89,670 Property, plant and equipment, net 17,211 13,710 Other assets 5,014 5,281 --------- --------- $ 111,653 $ 108,661 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 8,350 $ 8,384 Accrued liabilities 20,491 20,692 Income taxes payable 12,691 12,040 --------- --------- Total current liabilities 41,532 41,116 Deferred income taxes 1,081 1,081 Long-term debt 65,050 65,050 --------- --------- Total liabilities 107,663 107,247 --------- --------- Stockholders' equity: Common stock; $0.01 par value, 25,000,000 shares authorized, 8,147,335 and 8,388,956 shares issued and outstanding 86 84 Additional paid-in capital 56,539 55,726 Cumulative translation adjustment (891) (891) Accumulated deficit (39,730) (53,505) --------- --------- 16,004 1,414 Less: Treasury stock (common: 327,947 shares in fiscal year 1997) at cost (12,014) - --------- --------- Total stockholders' equity 3,990 1,414 --------- --------- $ 111,653 $ 108,661 ========= =========
See Notes to Unaudited Condensed Consolidated Financial Statements. Page 2 of 13 3 PLANTRONICS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED ------------------ ---------------- SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 1996 1995 1996 1995 ======== ======== ======== ======== Net sales $ 47,120 $ 45,175 $ 92,704 $ 89,284 Cost of sales 21,787 21,622 42,871 42,918 -------- -------- -------- -------- Gross profit 25,333 23,553 49,833 46,366 -------- -------- -------- -------- Operating expense: Research, development and engineering 3,270 3,607 6,733 7,193 Selling, general and administrative 9,833 8,386 19,353 16,629 -------- -------- -------- -------- Total operating expenses 13,103 11,993 26,086 23,822 -------- -------- -------- -------- Operating income 12,230 11,560 23,747 22,544 Interest expense, including amortization of debt issuance costs of $132, $132, $264 1,760 1,803 3,550 3,593 and $264 Interest income and other income, net (366) (468) (674) (591) -------- -------- -------- -------- Income before income taxes 10,836 10,225 20,871 19,542 Income tax expense 3,684 3,988 7,096 7,622 -------- -------- -------- -------- Net income attributable to holders of common stock $ 7,152 $ 6,237 $ 13,775 $ 11,920 ======== ======== ======== ======== Net income per common share attributable to holders of common stock $ 0.81 $ 0.70 $ 1.54 $ 1.34 ======== ======== ======== ======== Shares used in per share calculations 8,860 8,950 8,949 8,926 ======== ======== ======== ========
See Notes to Unaudited Condensed Consolidated Financial Statements. Page 3 of 13 4 PLANTRONICS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS)
SIX MONTHS SIX MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, 1996 1995 ========== ========= CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,775 $ 11,920 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and intangible assets 1,194 1,096 Other non-cash charges, net 342 382 Changes in assets and liabilities: Accounts receivable 253 (4,515) Provision for doubtful accounts 300 593 Inventory (1,840) 3,425 Other current assets 412 (243) Other assets 3 57 Accounts payable (34) 1,124 Accrued liabilities (201) 271 Income taxes 651 911 -------- -------- Cash provided by operating activities 14,855 15,021 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (4,695) (1,388) -------- -------- Cash used by investing activities (4,695) (1,388) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 737 168 Purchase of treasury stock (12,014) - -------- -------- -------- -------- Cash used for financing activities (11,277) 168 -------- -------- Net increase (decrease) in cash and cash equivalents (1,117) 13,801 Cash and cash equivalents at beginning of period 26,787 3,360 -------- -------- Cash and cash equivalents at end of period $ 25,670 $ 17,161 ======== ======== Supplemental disclosures: Cash paid for: Interest 3,281 3,297 Income taxes $ 4,047 $ 6,644 ======== ========
See Notes to Unaudited Condensed Consolidated Financial Statements. Page 4 of 13 5 PLANTRONICS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS The unaudited consolidated condensed financial statements included herein have been prepared by Plantronics, Inc. ("Plantronics") pursuant to the rules and regulations of the Securities and Exchange Commission. These financial statements reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the periods indicated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although Plantronics believes the disclosures which are made, when read in conjunction with the audited fiscal 1996 financial statements, are adequate to make the information presented not misleading. As used herein, references to the "Company" mean Plantronics and its consolidated subsidiaries. PERIODS PRESENTED. The Company's fiscal year-end is the Saturday closest to March 31st. For purposes of presentation, the Company has indicated its accounting year-end as March 31 and its second quarter-end as September 30. Plantronics' fiscal quarters ended September 30, 1996 and September 30, 1995 consisted of thirteen weeks each. 1. DETAILS OF CERTAIN BALANCE SHEET COMPONENTS: (in thousands)
September 30, March 31, 1996 1996 ======== ======== Inventories: Finished goods $ 7,303 $ 6,890 Work in process 2,382 4,631 Purchased parts 10,162 6,486 -------- -------- $ 19,847 $ 18,007 ======== ======== Property, plant and equipment: Land $ 4,693 $ 4,693 Buildings and improvements (useful lives: 10-40 years) 9,677 8,869 Machinery and equipment (useful lives: 4-8 years) 23,737 19,850 -------- -------- 38,107 33,412 Less accumulated depreciation (20,896) (19,702) -------- -------- $ 17,211 $ 13,710 ======== ========
2. FOREIGN CURRENCY TRANSACTIONS: The Company's functional currency for all operations is the U.S dollar. Accordingly, gains and losses resulting from the remeasurement of foreign subsidiaries' financial statements into U.S.dollars are included in other income (expense) in the consolidated statements of operations. Gains and losses resulting from foreign currency transactions are also included in other income (expense). Aggregate exchange gains in the three months ended September 30, 1996 and September 30, 1995 were $.1 million and $.2 million, respectively. For the six months ended September 30, 1996 aggregate exchange gains equaled aggregate exchange losses and for the six months ended September 30, 1995 there were $.1 million aggregate exchange gains. Page 5 of 13 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTERIM RESULTS OF OPERATIONS (THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1995) NET SALES. Net sales for the quarter ended September 30, 1996 were $47.1 million, an increase of 4.3% over the net sales of $45.2 million for the quarter ended September 30, 1995. Revenues in the international markets during the second quarter of fiscal 1997 grew 23% over the comparable period in fiscal 1996 as a result of increased investment and expansion during fiscal 1995 and fiscal 1996. GROSS PROFIT. Gross profit for the quarter ended September 30, 1996 was $25.3 million (53.8% of net sales), compared to $23.6 million (52.1% of net sales) for the same period in fiscal 1996, reflecting continuing benefit from manufacturing efficiencies and cost reduction programs. RESEARCH, DEVELOPMENT AND ENGINEERING. Research, development and engineering expenses for the quarter ended September 30, 1996 were $3.3 million (6.9% of net sales) compared to $3.6 million (8.0% of net sales) for the quarter ended September 30, 1995, due primarily to lower expenditures on project materials to support new product development in the quarter ended September 30, 1996. This reduction was, in part, a result of improvements in the purchasing and materials management processes. SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative expenses for the quarter ended September 30, 1996 were $9.8 million (20.9% of net sales) compared to $8.4 million (18.6% of net sales) for the quarter ended September 30, 1995. The increase was the result of additional staffing in domestic sales and marketing and to a lesser extent, increased expenditures in sales promotions and market research in the second quarter of fiscal 1997 compared to the same period in fiscal 1996. INCOME TAX EXPENSE. The Company's effective tax rate declined to 34% in the quarter ended September 30, 1996 from 39% in the quarter ended September 30, 1995, primarily as a result of international restructuring begun in the fourth quarter of fiscal 1996. INTERIM RESULTS OF OPERATIONS (SIX MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30, 1995) NET SALES. Net sales for the six-month period ended September 30, 1996 were $92.7 million, an increase of 3.8% over the net sales of $89.3 million for the six-month period ended September 30, 1995. International revenues for the first half of fiscal 1997 continued to increase, up $4.9 million (22.0%) over the comparable period in fiscal 1996. Domestic revenues were down $1.0 million for the first six months of fiscal 1997 primarily as a result of the anticipated decline ($2.1 million) in headset shipments to Lucent Technologies (formerly AT&T), principally due to the closing of their phone stores, offset partially by $1.1 million in increased sales through other domestic channels. GROSS PROFIT. Gross profit for the six-month period ended September 30, 1996 was $49.8 million (53.8% of net sales), compared to $46.4 million (51.9% of net sales) for the same period in fiscal 1996, reflecting continuing benefit from manufacturing efficiencies and cost reduction programs. RESEARCH, DEVELOPMENT AND ENGINEERING. Research, development and engineering expenses for the six-month period ended September 30, 1996 were $6.7 million (7.3% of net sales) compared to $7.2 million (8.0% of net sales) for the six-month period ended September 30, 1995, due primarily to lower expenditures on project materials to support new product development in the first half of fiscal 1997. This reduction was, in part, a result of improvements in the purchasing and materials management processes. SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative expenses for the six-month period ended September 30, 1996 were $19.4 million (20.9% of net sales) compared to $16.6 million (18.6% of net sales) for the Page 6 of 13 7 six-month period ended September 30, 1995. The increase was the result of additional staffing in domestic sales and marketing and to a lesser extent, increased expenditures on sales promotions and market research in the second half of fiscal 1997 compared to the same period in fiscal 1996. INCOME TAX EXPENSE. The Company's effective tax rate declined to 34% in the six-month period ended September 30, 1996 from 39% in the six-month period ended September 30, 1995, primarily as a result of international restructuring begun in the fourth quarter of fiscal 1996. FOREIGN CURRENCY Through fiscal 1996, intercompany transactions between the Company and its United Kingdom subsidiary posed the greatest foreign currency risk. The Company managed this risk by timely payments of intercompany liabilities. Remaining currency risk, in the opinion of management, was not material and, accordingly, the Company did not engage in hedging transactions. Beginning in fiscal 1997, the intercompany transaction risk described above has been eliminated as a result of the restructuring of the Company's international operations. However, the Company is subject to greater remeasurement exposure to its operating results with the United Kingdom subsidiary's adoption of the U.S. dollar as its functional currency. The Company's peso transaction exposure at its manufacturing subsidiary in Tijuana, Mexico is limited principally to payroll expenditures. In the opinion of management, the favorable effects to the Company from the devaluation of the peso in the periods reported were not material. LIQUIDITY AND CAPITAL RESOURCES The Company's principal source of liquidity in the six-month period ended September 30, 1996 was $14.9 million of cash generated from operating activities. In the six-month period ended September 30, 1995, liquidity was principally provided by $15.0 million of cash generated from operating activities. Cash and cash equivalents increased to $25.7 million at September 30, 1996 from $17.2 million at September 30, 1995, primarily due to cash provided by operating activities in the second half of fiscal 1996. In the last quarter of fiscal 1996, the Company terminated $9.0 million of its $29.0 million revolving credit facility. The remaining $20.0 million facility includes a $4.0 million letter of credit facility. As of September 30, 1996, the Company had no cash borrowings under the revolving credit facility and $2.7 million outstanding under the letter of credit facility. According to borrowing base limitations, available borrowings under the revolving credit facility at September 30, 1996 were $16.1 million, after reductions for letter of credit obligations. The revolving credit facility is secured by accounts receivable and related assets. The terms of the credit facility contain covenants which materially limit the Company's ability to incur debt, make capital expenditures and pay dividends, among other matters. These covenants may have a materially adverse effect on the Company to the extent it cannot comply with them or it must limit its ordinary course activities. OPERATING ACTIVITIES. In the six-month period ended September 30, 1996 the Company generated $14.9 million in net cash from operating activities, primarily as a result of $13.8 million in net income after depreciation of $1.2 million and partially offset by an increase in inventory of $1.8 million. The $1.8 million increase was primarily due to new product inventory. INVESTING ACTIVITIES. Capital expenditures were $4.7 million in the six-month period ended September 30, 1996, compared to $1.4 million in the six-month period ended September 30, 1995. The increase in capital expenditures was primarily due to investment in a significant upgrade to the Company's business information system in the first half of fiscal 1997. The Company expects to invest an additional $2.0 to $3.0 million in the systems upgrade by the middle of fiscal 1998. FINANCING ACTIVITIES. In the six-month period ended September 30, 1996, the Company repurchased 327,947 shares of its Common Stock for $12.0 million and received $0.7 million in proceeds from the exercise of stock options. The Company's financing activities during the six-month period ended September 30, 1995 were limited to the Page 7 of 13 8 receipt of $.2 million in stock option exercise proceeds. During the period October 1, 1996 through November 7, 1996, 18,266 shares were repurchased for $0.7 million. The Company has Senior Notes in a principal amount of $65.1 million outstanding that bear interest, payable semiannually, at a rate of 10% per annum and mature on January 15, 2001. The Senior Notes are redeemable, at the Company's option, in whole or in part, any time after January 15, 1999. The Senior Note Indenture contains certain covenants that, among other things, limit the ability of the Company and its subsidiaries to incur indebtedness, pay dividends, issue preferred stock of subsidiaries, engage in transactions with affiliates, create liens, engage in mergers and consolidations, make certain asset sales or make certain investments. The Senior Note Indenture also provides that holders of the Senior Notes have the right to require the Company to repurchase the Senior Notes in the event of a "change in control" and certain various customary events of default. The Company believes that current balances and cash provided by operations, together with available borrowing capacity under the revolving credit facility, will be sufficient to make required interest payments under the Senior Notes and to fund operations at least through fiscal 1997. Subject to the terms and conditions of the 10% Senior Note Indenture and the Company's revolving credit facility, the Company may use cash for such purposes as paying down the line of credit, repurchasing Senior Notes or acquiring complementary businesses, products or technologies. FORWARD LOOKING STATEMENTS AND FACTORS AFFECTING FUTURE OPERATING RESULTS The statement in the last sentence of the paragraph captioned "Investing Activities" is a forward looking statement which involves risk and uncertainties. In addition, the Company may from time to time make oral forward looking statements. The Company's actual results could differ materially from those anticipated in these forward looking statements as a result of the following factors: NEED TO SUCCESSFULLY DEVELOP NEW PRODUCTS AND MARKETS. The Company's net sales to date have been derived principally from the sale of lightweight communications headsets ("tops") and associated bases ("bottoms"). Historically, a substantial amount of the Company's sales have been made through distributors to call center users and its product development efforts have primarily been directed toward incremental enhancements of existing products. In the future, the Company intends to both enhance its existing products and to develop new products that capitalize on its core technology and expand the Company's product offerings to new user market segments. The success of new product introductions is dependent on several factors, including proper new product selection, timely completion and introduction of new product designs, quality of new products and market acceptance. The Company has recently expanded its marketing efforts to sell lightweight headsets to the business and home office user market. Although the Company has attempted to determine the specific needs of these new market segments, there can be no assurance that the market niches identified will in fact materialize or that the Company's future products designed for these market segments will gain substantial market acceptance. COMPETITION. As the Company develops new generations of products and enters new market segments, including the developing business and home office user segment of the market, the Company anticipates that it may face additional competition from companies which currently do not offer communication headsets. Such companies may be larger, offer broader product lines and have substantially greater financial and other resources than the Company. Such competition could negatively affect pricing and gross margins. Although the Company has historically competed very successfully in the call center segment of the market, there can be no assurance that it will be able to continue its leadership position in that segment of the market or that the Company will be able to compete successfully in new market segments. DEMAND OF CHANGING TECHNOLOGIES. The technology of telephone headsets, both "tops" and "bottoms," has traditionally evolved slowly. Products have generally exhibited life cycles of three to five years before introduction of the next generation of products, which usually included stylistic changes and quality improvements but were based on similar technology. The Company believes that future changes in technology may come at a faster pace, particularly in the telephone, cellular telephone and computer segments of the business and home office user parts of Page 8 of 13 9 the market. The Company's future success will be dependent in part on its ability to develop products that utilize new technologies and to introduce them to the marketplace successfully. In addition, in order to avoid product obsolescence, the Company will have to monitor technological changes in telephony, as well as users' demands for new technologies. Failure by the Company to keep pace with future technological changes could materially adversely affect the Company's revenues and operating results. UTILIZATION OF SINGLE SOURCE SUPPLIERS. The Company's manufacturing operations primarily consist of assembly of components and subassemblies that Plantronics manufactures or purchases from a variety of sources. Although most components and subassemblies used in the Company's manufacturing operations are obtained, or are reasonably available, from numerous sources, certain of its products and components (including semicustom integrated circuits that are key components of the Company's products) are currently obtained only from single suppliers. The Company currently purchases such components on a purchase order basis and does not intend to enter into master purchase agreements with any of its single source suppliers. The Company has to date experienced only minor interruptions in the supply of these components, none of which has adversely affected its operations. However, an interruption in supply from any of the Company's single source suppliers in the future could temporarily result in the Company's inability to deliver products on a timely basis, which in turn could adversely affect its operations. IMPORTANCE OF PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS. The Company's success will depend in part on its ability to obtain patents and preserve other intellectual property rights covering the design and operation of its products. The Company currently holds certain patents and intends to continue to seek patents on its inventions when appropriate. The process of seeking patent protection can be lengthy and expensive, and there can be no assurance that patents will issue from currently pending or future applications or that the Company's existing patents or any new patents issued will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to the Company. The Company may be subjected to, or may initiate, litigation or patent office interference proceedings, which may require significant financial and management resources. The failure to obtain necessary licenses or other rights or the advent of litigation arising out of any such claims could have a material adverse effect on the Company's operations. RISK ASSOCIATED WITH FOREIGN OPERATIONS AND SALES. Approximately 26.8% of the Company's net sales in fiscal 1996 were derived from sales to foreign customers. In addition, the Company conducts approximately 94% of its headset assembly operations and obtains components from various foreign suppliers. Manufacturing and sales of the Company's products could be adversely affected by political or economic conditions in the United States or abroad, particularly in Mexico. Sales to foreign customers and purchases of materials and components from foreign suppliers are also generally subject to such risks as increased tariffs and the imposition of other trade barriers. Although the Company generally transacts business internationally in United States currency, declines in the values of local currencies relative to the United States dollar in countries in which the Company does business could adversely affect the Company by resulting in less competitive pricing for the Company's products. The Company does not currently engage in any hedging activities to mitigate exchange rate risks and to date has not been adversely affected by fluctuating currencies. To the extent that the Company is successful in increasing its sales to foreign customers, or to the extent that the Company increases its transactions in foreign currencies, the Company's results of operations could be adversely affected by exchange rate fluctuations. DEPENDENCE UPON SENIOR MANAGEMENT. The Company believes that it has benefited substantially from the leadership of Robert S. Cecil, the Chairman of the Board, President and Chief Executive Officer of the Company, and the other current members of senior management, and that the loss of their services could have a material adverse effect on the Company's business and future operations. Although the Company has an employment agreement with Mr. Cecil, such agreement permits him to voluntarily terminate his employment at any time. In addition, although Mr. Cecil's agreement contains a five-year non-compete covenant which takes effect upon termination of his employment, such covenants are generally not enforceable under California law. Page 9 of 13 10 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS (a) The 1996 Annual Meeting of Stockholders of Plantronics, Inc. (the "Company") was held at the offices of Plantronics, Ltd., Interface Business Park, Bincknoll Lane, Wootton Bassett, Wiltshire, SN4 8QQ, United Kingdom on August 6, 1996 at 2:00 p.m. (the "Annual Meeting"). (b) At the Annual Meeting, the following seven individuals were elected to the Company's Board of Directors, constituting all members of the Board of Directors:
VOTES WITHHELD BROKER NOMINEE CAST FOR OR AGAINST NON-VOTES - ------- -------- ---------- --------- Richard D. Banziger 7,260,780 31,660 -0- Robert S. Cecil 7,260,880 31,560 -0- M. Saleem Muqaddam 7,260,380 32,060 -0- John Mowbray O'Mara 7,260,880 31,560 -0- Trude C. Taylor 7,260,880 31,560 -0- J. Sidney Webb 7,260,880 31,560 -0- David A. Wegmann 7,260,880 31,560 -0-
(c) The following additional proposals were considered at the Annual Meeting and were approved by the vote of the Stockholders, in accordance with the tabulation shown below. (1) Ratification and approval of the adoption of the 1996 Employee Stock Purchase Plan. VOTES CAST FOR AGAINST ABSTENTIONS BROKER NON-VOTES -------------- ------- ----------- ---------------- 6,441,009 8,966 2,500 839,965
(2) Ratification and approval of a 490,000 share increase in the Common Stock issuable under the 1993 Stock Option Plan. VOTES CAST FOR AGAINST ABSTENTIONS BROKER NON-VOTES -------------- ------- ----------- ---------------- 5,260,642 1,168,501 5,100 858,197
(3) Ratification and approval of a 10,000 share increase in the Common Stock issuable under the 1993 Directors' Stock Option Plan.
VOTES CAST FOR AGAINST ABSTENTIONS BROKER NON-VOTES -------------- ------- ----------- ---------------- 6,012,301 442,474 5,200 832,465
(4) Ratification of the appointment of Price Waterhouse LLP as independent public accountants of the Company for the fiscal year ending March 29, 1997.
VOTES CAST FOR AGAINST ABSTENTIONS -------------- ------- ----------- 7,289,571 2,300 569
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: The following exhibits are filed as part of this Quarterly Report on Form 10-Q. 27 Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K were filed by Registrant during the fiscal quarter ended September 28, 1996. Page 10 of 13 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PLANTRONICS, INC. ---------------------------------------------- (Registrant) November 12, 1996 /s/ DANIEL A. GAUDREAU - ------------------------ ---------------------------------------------- (Date) (Signature) Daniel A. Gaudreau Vice President November 12, 1996 /s/ DANIEL A. GAUDREAU - ------------------------ ---------------------------------------------- (Date) (Signature) Daniel A. Gaudreau Vice President - Finance and Administration and Chief Financial Officer (Principal Financial Officer) Page 11 of 13 12 EXHIBIT INDEX Page in Sequential Exhibit Numbering Number System 27 Financial Data Schedule 13 Page 12 of 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS INCLUDED IN THE FORM 10-Q FILED BY PLANTRONICS, INC. FOR THE PERIOD ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 6-MOS MAR-29-1997 MAR-31-1996 SEP-28-1996 1 25,670 0 38,002 0 19,847 89,428 38,107 20,896 111,653 41,532 65,050 0 0 86 3,904 111,653 92,704 92,704 42,871 42,871 26,086 0 3,550 20,871 7,096 13,775 0 0 0 13,775 1.54 1.54
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