8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): August 18, 2005

Plantronics, Inc.

(Exact name of Registrant as Specified in its Charter)

Delaware	1-12696	77-0207692
(State or Other Jurisdiction of Incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)

345 Encinal Street

Santa Cruz, California 95060

(Address of Principal Executive Offices)

(831) 426-5858

(Registrant's Telephone Number, Including Area Code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01Completion of Acquisition or Disposition of Assets

On August 18, 2005, Plantronics, Inc. (“the Company”) filed a Current Report on Form 8-K reporting the completion of its acquisition of Altec Lansing Technologies, Inc. (“Altec Lansing”). This Amendment No. 1 is being filed to amend Item 9.01 of the subject Form 8-K in order to provide the required financial statements of Altec Lansing and the required pro forma financial information related to the Company’s acquisition of Altec Lansing.

Item 9.01Financial Statements and Exhibits

(a) Financial Statements of Business Acquired.

Financial Statements of Altec Lansing:

· Report of Independent Registered Public Accounting Firm

· Audited Consolidated Balance Sheet as of December 31, 2004, and Statement of Operations, Cash Flows, and Stockholders’ Equity for the year ended December 31, 2004

· Unaudited Condensed Consolidated Balance Sheet as of June 30, 2005, and Statement of Operations and Cash Flows for the six months ended June 30, 2005 and 2004

(b) Pro Forma Financial Information

· Unaudited Pro Forma Condensed Combined Balance Sheet at June 30, 2005

· Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended March 31, 2005 and the three month period ended June 30, 2005

· Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

(c) Exhibits

Exhibit	Description
23.1	Consent of Independent Registered Public Accounting Firm
99.1	Altec Lansing Audited Consolidated Balance Sheet as of December 31, 2004, and Statement of Operations, Cash Flows, and Changes in Stockholders’ Equity for the year ended December 31, 2004
99.2	Altec Lansing Unaudited Condensed Consolidated Balance Sheet as of June 30, 2005, and Statement of Operations and Cash Flows for the six months ended June 30, 2005 and 2004
99.3	Unaudited Pro Forma Condensed Combined Balance Sheet at June 30, 2005, and Statement of Operations of the Company for the year ended March 31, 2005 and three months ended June 30, 2005

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SIGNATURE

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 authorized.

	PLANTRONICS, INC.
Date: October 20, 2005	By:	/s/ Barbara Scherer
		Barbara Scherer
		Senior Vice President and Chief Financial Officer

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EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-127672, 333-120364, 333-107218, 333-97091, 333-67094, 333-42664, 033-81980, 333-61003, 333-19351 and 333-14833) and Form S-3 (Nos. 333-92040, 333-37876, 333-77631, 333-70333 and 333-67781) of Plantronics, Inc. of our report dated March 9, 2005, except for Note 15, as to which the date is July 11, 2005, with respect to the consolidated financial statements of Altec Lansing Technologies, Inc. for the year ended December 31, 2004, which appears in this Form 8K/A.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

October 14, 2005

EX-99.1

  
    
      Consolidated Financial Statements of Altec at December 31, 2004





  
    

EX-99.2

Exhibit 99.2

ALTEC LANSING TECHNOLOGIES, INC.

CONDENSED COMBINED FINANCIAL STATEMENTS

(Unaudited)

TABLE OF CONTENTS

	Page No
Condensed Consolidated Balance Sheet as of June 30, 2005	3
Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2005 and 2004	4
Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2005and 2004	5
Notes to Condensed Consolidated Financial Statements	6

ALTEC LANSING TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

	June 30,
(in thousands, except per share data)	2005
ASSETS
Current assets:
Cash	$	4,537
Accounts receivable, net of allowances of $6,790		12,731
Inventories		21,192
Deferred income taxes		2,548
Prepaid expenses and other current assets		2,245
Total current assets		43,253
Property, plant, and equipment at cost, net		6,756
Other assets		176
Trademark		12,502
Total assets	$	62,687
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable	$	17,195
Accrued expenses		4,594
Current maturities of long-term debt		177
Current maturities of capital lease liabilities		274
Total current liabilities		22,240
Long-term debt		6,857
Notes payable to stockholders		2,500
Capital lease liabilities		67
Other long-term liabilities		1,296
Minority interest		170
Deferred tax liabilities		4,580
Total liabilities		37,710
Stockholders’ equity:
Capital stock:
Series A convertible preferred stock, par value $.01: authorized 7,500,000 shares; 5,766,000 shares issued and outstanding (aggregate liquidation preference of $7,000)		-
Preferred stock, par value $.01: authorized 5,000,000 shares; none issued or outstanding		-
Common stock, par value $.01: authorized 50,000,000 shares; 6,500,000 shares issued and outstanding		65
Additional paid-in capital		12,528
Unearned compensation		(329	)
Retained earnings		12,713
Total stockholders’ equity		24,977
Total liabilities and stockholders’ equity	$	62,687

See accompanying notes.

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ALTEC LANSING TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(in thousands)	Six months ended June 30
	2005			2004
Net sales	$	68,282		$	48,039
Cost of sales		41,171			34,072
Gross profit		27,111			13,967
Selling, general, and administrative expenses		12,163			8,845
Research and development		3,218			2,403
		15,381			11,248
Operating income		11,730			2,719
Interest expense		610			754
Other		535			182
Income before income taxes		10,585			1,783
Income tax (expense) benefit		(4,002	)		293
Net income	$	6,583		$	2,076

See accompanying notes.

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ALTEC LANSING TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(in thousands)	Six months ended June 30
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	6,583		$	2,076
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for allowances on accounts receivable		(262	)		(304	)
Provision for losses on inventory		1,019			240
Stock compensation		1,390			-
Depreciation and amortization		1,065			1,427
Deferred tax		-			(293	)
Changes in assets and liabilities:
Accounts receivable		10,195			3,205
Inventories		(5,857	)		(3,828	)
Prepaid expenses and other assets		(600	)		134
Accounts payable, accrued expenses, and other liabilities		(3,393	)		(2,205	)
Net cash provided by operating activities		10,140			452
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(1,134	)		(644	)
Net cash used in investing activities		(1,134	)		(644	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (payments) proceeds under line of credit		(8,110	)		3,221
Principal payments on long-term debt		(341	)		(348	)
Payments on capital lease obligations		(135	)		(75	)
Net cash (used in) provided by financing activities		(8,586	)		2,798
Net increase in cash		420			2,606
Cash at beginning of period		4,117			1,739
Cash at end of period	$	4,537		$	4,345
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest expense	$	527		$	433
Cash paid for income taxes	$	4,332		$	14
Assets acquired under capital lease obligations	$	192		$	-

See accompanying notes

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ALTEC LANSING TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(Dollars in thousands)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the U.S. These condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments), which are in the opinion of management, necessary for a fair presentation of the results for the interim periods. Interim results are not necessarily indicative of results that may be expected for the full year.

2. INVENTORIES

Inventories consist of the following as of June 30, 2005:

Raw materials	$	1,850
Work-in-progress		351
Finished goods		18,991

3. STOCK OPTIONS

The Company applies Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, together with Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, as permitted under SFAS No. 123, in accounting for its stock option plans. Accordingly, the Company uses the intrinsic value method to measure the costs associated with the granting of stock options to employees and this cost is accounted for as compensation expense in the consolidated statements of operations over the option vesting period or upon meeting certain performance criteria. In accordance with SFAS No. 123, the Company discloses the fair values of stock options issued to employees. Fair values of stock options are determined using the Black-Scholes option-pricing model. Pro forma disclosures as if compensation expense had been recognized for options granted in 2002 and 2001 in compliance with SFAS No. FAS 123 and SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure, are not presented, as such effects are not material to the results of operations in 2005.

4. LONG-TERM DEBT

The Company’s long-term debt is summarized as follows as of June 30, 2005:

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ALTEC LANSING TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(Dollars in thousands)

Revolving credit line	$	5,006
Mortgage note, payable in monthly installments of $8 through September 2016, including interest at a variable rate (5.25% at June 30, 2005); secured by real property		788
Mortgage note, payable in monthly installments of $19 through June 2020, including interest at a variable rate that is set every three years (7.5% at June 30, 2005); secured by real property		1,189
Mortgage note, payable in monthly installments of $1 through July 2016, including interest at a variable rate (5.25% at June 30, 2005); secured by real property		51
		7,034
Less current maturities		177
	$	6,857

5. INCOME TAXES

For the six months ended June 30, 2005 and 2004, we recorded income tax expense (benefit) of $4,002 and $(293) at effective rates of 37.81% and (16.43%), respectively. The Company’s effective tax rate for the six months ended June 30, 2004 is due to the Company’s release of certain valuation allowance against Federal and state net operating losses.

6. GEOGRAPHIC INFORMATION

Information about the Company’s operations in the United States and other countries is as follows as of June 30, 2005 and for the six months ended June 30, 2005 and 2004:

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ALTEC LANSING TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

(Dollars in thousands)

	Six months ended June 30,
Net sales	2005		2004
United States	$	55,807	$	34,848
Asia		12,475		13,191
Consolidated	$	68,282	$	48,039
		June 30,
Identifiable assets		2005
United States	$	54,118
Asia		8,569
Consolidated	$	62,687

Identifiable assets are those assets of the Company that are identified with the operations in each geographic area.

7. STOCK INCENTIVE PLAN

On November 8, 2001, the Company entered into a Stock Award Agreement with an executive. Per the Agreement, the Company issued 500,000 shares of Company common stock. The shares are subject to several vesting and forfeiture provisions, including time-based and performance conditions. The total compensation expense recorded for the six months ended June 30, 2005 and 2004 was $1,390 and $0, respectively and is included in Selling, general, and administrative expenses in the accompanying Consolidated Statement of Operations. As of June 30, 2005, 250,000 of these shares have vested, with the remaining 250,000 considered probable of vesting in 2005.

8. SALE OF BUSINESS

On July 11, 2005, the Company entered into a definitive Agreement and Plan of Merger with Plantronics, Inc. under which Plantronics will acquire all of the Company’s issued and outstanding stock for $166 million. The transaction is expected to close in August 2005.

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

TABLE OF CONTENTS

	Page No.
Basis of Presentation	2
Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2005	4
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended March 31, 2005	5
Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended June 30, 2005	6
Notes to Unaudited Pro Forma Condensed Combined Financial Information	7

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

BASIS OF PRESENTATION

The following Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2005 and the Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended March 31, 2005 and for the three months ended June 30, 2005 are based on the historical financial statements of Plantronics, Inc. ("Plantronics") and Altec Lansing Technologies, Inc. ("Altec Lansing") after giving effect to the purchase of Altec Lansing by Plantronics based on the assumptions and adjustments described in the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements.

Plantronics’ fiscal year ends on the Saturday closest to March 31. The 2005 fiscal year ended on April 2, 2005 consisted of 52 weeks. Our first quarter end of fiscal 2006 was on July 2, 2005 and consisted of 13 weeks. For purposes of presentation, we have indicated our accounting year as ending on March 31 and our quarterly period as ending on the applicable month end.

The Unaudited Pro Forma Condensed Combined Financial Statements have been prepared using the purchase method of accounting as if the transaction had been completed as of April 1, 2004 for purposes of the Unaudited Condensed Combined Statements of Operations and on June 30, 2005 for purposes of the Unaudited Condensed Combined Balance Sheet.

Altec Lansing’s fiscal year end is December 31. For purposes of the Condensed Combined Statement of Operations for the year ended March 31, 2005, we have added Altec Lansing’s Statement of Operations for the three month period ended March 31, 2005 to Altec Lansing’s Statement of Operations for the year ended December 31, 2004 and subtracted Altec Lansing’s Statement of Operations for the three month period ended March 31, 2004 in order to produce a period comparable to Plantronics' Statement of Operations for the year ended March 31, 2005.

The Unaudited Pro Forma Condensed Combined Financial Statements should be read in conjunction with the separate historical Consolidated Financial Statements and accompanying notes included in Plantronics' Annual Report on Form 10-K for the year ended March 31, 2005 and Quarterly Report on Form 10-Q for the three months ended June 30, 2005 and Altec Lansing’s Consolidated Financial Statements for its fiscal year ended December 31, 2004 and its Unaudited Consolidated Financial Statements for the six months ended June 30, 2005. The Unaudited Pro Forma Condensed Combined Financial Statements are not intended to be indicative of the consolidated results of operations or the financial condition of Plantronics that would have been reported had the merger been completed as of the dates presented and should not be taken as representative of the future consolidated results of operations or financial condition of Plantronics. The accompanying Unaudited Pro Forma Condensed Combined Financial Statements are presented in accordance with Article 11 of Regulation S-X.

Under the purchase method of accounting, the purchase price is allocated to the underlying assets acquired and liabilities assumed based on their respective fair market values, with any excess purchase price allocated to goodwill. The pro forma purchase price allocation has been derived from estimates of the fair market value of the tangible and intangible assets and liabilities of Altec Lansing based upon management’s estimates using established valuation techniques. Certain assumptions have been made with respect to the fair market value of identifiable intangible assets as more fully described in the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information. The total purchase price of Altec Lansing has been allocated on a preliminary basis to identifiable assets acquired and liabilities assumed based upon valuation procedures performed to date. This allocation is subject to change pending a final analysis of the total purchase price paid, including the direct costs of the acquisition and the estimated fair value of the assets acquired and liabilities assumed; however, the Company does not believe that the impact of these changes will be material.

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The Unaudited Pro Forma Condensed Combined Financial Statements do not reflect any effect of operating efficiencies, cost savings, and other benefits anticipated by the Plantronic' management as a result of the merger. Additionally, certain integration costs may be recorded subsequent to the merger that under purchase accounting will not be treated as part of the Altec Lansing purchase price. These costs have not been reflected in these Unaudited Pro Forma Condensed Combined Statements of Operations because they are not expected to have a continuing impact on the combined results.

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PLANTRONICS, INC.

PRO FORMA CONDENSED COMBINED BALANCE SHEET

June 30, 2005

(in thousands, unaudited)		Plantronics as Reported*			Altec Lansing, as Provided**			Pro Forma Adjustments		Note 2.		Consolidated Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	87,505		$	4,537		$	-			$	92,042
Marketable securities		124,723			-			(120,156	)	a.		4,567
Accounts receivable, net		88,576			12,731							101,307
Inventory, net		56,441			21,192			4,604		b.		82,237
Deferred income taxes		9,915			2,548			879		g.		13,342
Other current assets		11,196			2,245			381		i.		13,822
Total current assets		378,356			43,253			(114,292	)			307,317
Property, plant and equipment, net		66,445			6,756			1,386		c.		74,587
Intangibles, net		7,146			-			107,400		d.		114,546
Trademark		-			12,502			(12,502	)	d.		-
Goodwill, net		11,562			-			41,699		e.		53,261
Other assets		8,969			176			686		i.		9,831
Total assets	$	472,478		$	62,687		$	24,377			$	559,542
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit	$	-		$	-		$	45,000		a.	$	45,000
Accounts payable		25,926			17,195			-				43,121
Accrued liabilities		34,826			4,594			(273	)	f.		39,147
Current portion of long term debt		-			177			(177	)	f.		-
Current maturities of capital lease liabilities		-			274			(274	)	f.		-
Income taxes payable		15,561			-			(2,539	)	g.		13,022
Total current liabilities		76,313			22,240			41,737				140,290
Deferred tax liability		9,230			4,580			18,111		g.		31,921
Long term liability		2,344			6,857			(6,857	)	f.		2,344
Notes payable to stockholders		-			2,500			(2,500	)	f.		-
Capital lease obligations		-			67			(67	)	f.		-
Other long term liabilities		-			1,296			-				1,296
Minority Interest		-			170			(170	)	h.		-
Total liabilities		87,887			37,710			50,254				175,851
Stockholders' equity:
Preferred stock		-			-
Common stock		652			65			(65	)	h.		652
Additional paid-in capital		295,732			12,528			(12,528	)	h.		295,732
Deferred stock compensation		(2,099	)		(329	)		329		h.		(2,099	)
Accumulated other comprehensive income		6,193			-			-				6,193
Retained earnings		457,198			12,713			(13,613	)	h.		456,298
		757,676			24,977			(25,877	)			756,776
Less: Treasury stock		(373,085	)		-			-				(373,085	)
Total stockholders' equity		384,591			24,977			(25,877	)			383,691
Total liabilities and stockholders' equity	$	472,478		$	62,687		$	24,377			$	559,542
*   Reported on Form 10-Q as of June 30, 2005
** See Exhibit 99.2 of this Form 8-K/A

See accompanying notes to unaudited pro forma condensed combined financial information.

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PLANTRONICS, INC.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

Year Ended March 31, 2005

(UNAUDITED)

(in thousands)		Plantronics as Reported*		Altec Lansing, As Provided**			Pro Forma Adjustments		Note 3.		Consolidated Pro Forma
Net revenues	$	559,995	$	128,976		$	-			$	688,971
Cost of revenues		271,537		84,200			(1,289	)	d.		354,448
Gross profit		288,458		44,776			(1,289	)			334,523
Operating expenses:
Research, development and engineering		45,216		5,458			1,289		d.		51,963
Selling, general and administrative		116,621		20,437			7,473		a.		144,593
							62		b.
							381		g.
Total operating expenses		161,837		25,895			8,824				196,556
Operating income		126,621		18,881			(7,535	)			137,967
Interest and other income (expense), net		3,739		(2,547	)		(5,010	)	c.		(2,234	)
							1,584		e.
Income before income taxes		130,360		16,334			(10,961	)			135,733
Income tax expense (benefit)		32,840		724			(15	)	f.		33,549
Net income	$	97,520	$	15,610		$	(10,946	)		$	102,184
Net income per share - basic	$	2.02				$	0.11			$	2.12
Shares used in basic per share calculation		48,249					-				48,249
Net income per share - diluted	$	1.92				$	0.09			$	2.01
Shares used in diluted per share calculation		50,821					-				50,821
*  Reported on Form 10-K for Year Ended December 31, 2004
**Derived from adding the Statement of Operations for the three months ended March 31, 2005 to the year ended December 31, 2004 less the three months ended March 31, 2004.

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PLANTRONICS, INC.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

Three Months Ended June 30, 2005

(UNAUDITED)

(in thousands)	Plantronics, as Reported*		Altec Lansing, as Provided		Pro Forma Adjustments			Note 4.		Consolidated Pro Forma
Net revenues	$148,909		$34,877		$-					$183,786
Cost of revenues	75,760		20,608		(300)			d.		96,068
Gross profit	73,149		14,269		300					87,718
Operating expenses:
Research, development and engineering	13,766		1,790		300			d.		15,856
Selling, general and administrative	29,892		7,048		1,773			a.		38,823
					15			b.
					95			g.
Total operating expenses	43,658		8,838		2,183					54,679
Operating income	29,491		5,431		(1,883)					33,039
Interest and other income (expense), net	232		(708)		(935)			c.		(1,118)
					293			e.
Income before income taxes	29,723		4,723		(2,525)					31,921
Income tax expense		8,025		1,786		75			f.		9,886
Net income	$	21,698	$	2,937	$	(2,600	)			$	22,035
Net income per share - basic	$	0.46			$	0.01				$	0.47
Shares used in basic per share calculation		47,386				-					47,386
Net income per share - diluted	$	0.44			$	0.01				$	0.45
Shares used in diluted per share calculation		49,335				-					49,335
*   Reported on Form 10-Q for Quarter Ended June 30, 2005

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PLANTRONICS, INC.

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(UNAUDITED)

NOTE 1. DESCRIPTION OF TRANSACTION

On August 18, 2005, the Company completed its acquisition of Altec Lansing under a definitive Agreement and Plan of Merger (the “Merger Agreement”) with Sonic Acquisition Corporation, a Pennsylvania corporation and direct wholly-owned subsidiary of Plantronics (the “Merger Sub”), Altec Lansing, a Pennsylvania corporation, and certain other parties named therein. Under the terms of the Merger Agreement, the Merger Sub merged with and into Altec Lansing, with Altec Lansing continuing as the surviving corporation and a wholly-owned subsidiary of Plantronics. Plantronics acquired all of the capital stock of Altec Lansing through the Merger Sub for a cash purchase price, including acquisition costs, of approximately $165 million.

NOTE 2. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

The Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2005 gives effect to the acquisition as if it had occurred on June 30, 2005. Under purchase accounting, the purchase price is allocated to assets acquired and liabilities assumed based on their relative fair values with the excess recorded as goodwill.

The following information on the components and allocation of the purchase price is based on Plantronics’ preliminary evaluation and review of the assets acquired and liabilities assumed and may change as those evaluations and reviews are completed. Among other things, the cash consideration paid by Plantronics may be different than the estimated purchase price below as a result of the outcome of certain adjustment elements in the Merger Agreement. These elements include, but are not limited to, potential claims against the escrow account. Upon the final resolution of these adjustment elements, adjustments to the amount and allocation of the purchase price may be required.

The components of the purchase price were as follows:

(in thousands)
Paid to Altec Lansing	$	154,273
Payment of Altec Lansing pre-existing debt		9,906
Acquisition costs		977
Total cash consideration	$	165,156

For the purposes of determining the purchase price allocation, the fair market value of intangible assets was estimated as of August 18, 2005, the actual closing date of the acquisition. The allocation of the purchase price is as follows:

(in thousands)
Total cash consideration	$	165,156
Less cash balance acquired		4,537
		160,619
Allocated to:
Prepaid Compensation		1,067
Inventory		25,796
Other current assets		15,152
Property, plant, and equipment		8,142
Identifiable intangible assets		108,300
Deferred income tax assets		3,427
Current liabilities		(20,273	)
Deferred tax liability		(22,691	)
Goodwill	$	41,699

-7-

Goodwill has been recorded based on the residual purchase price after allocating the purchase price to the fair market value of tangible and intangible assets acquired less liabilities assumed and to intangible assets. Goodwill arises as a result of, among other factors, future unidentified new products, new technologies and new customers as well as the implicit value of future cost savings as a result of the combining of entities. In accordance with Statement of Financial Accounting Standards No. 142: Goodwill and Other Intangible Assets (“SFAS 142”), goodwill will not be amortized but will be tested at least annually for impairment. Goodwill is not expected to be deductible for tax purposes under Internal Revenue Code Section 197.

The following adjustments have been reflected in the Unaudited Pro Forma Condensed Combined Balance Sheet:

a.   To adjust marketable securities and line of credit for the payment of the purchase price. Cash resources are shown in the following table:

(in thousands)
Paid with Marketable securities	$	120,156
Paid with borrowings under Line of credit		45,000
Total	$	165,156

We financed $45.0 million of the purchase price with a credit facility which bears interest at LIBOR plus 0.750% and has a maturity date of August 1, 2010.

b.   To adjust inventory acquired to represent fair value at the date of acquisition. The fair value was determined with the assistance of an independent appraiser. The following table presents the fair value allocated to inventory at certain stages of the production cycle:

(in thousands)		Fair Value		Net Book Value		Adjustment
Raw materials	$	1,664	$	1,664	$	-
Work-In-Process		592		352		240
Finished goods		23,540		19,176		4,364
Total	$	25,796	$	21,192	$	4,604

Raw materials inventory is readily replaceable at net book value, and therefore represents fair value. We determined the fair value of Work-in-process and Finished goods based on the comparative sales method. The comparative sales method utilizes the actual or expected selling price of finished goods to customers taking into consideration the costs to complete Work-in-process inventories, profit attributable to the manufacturing and disposal effort, and other costs associated with the holding and selling of the inventory.

c.   To adjust Land and Building to represent fair value at the date of acquisition. The fair value was determined with the assistance of an independent appraiser. The following table shows the fair value of Altec Lansing’s Land and Building acquired:

(in thousands)		Fair Value		Net Book Value		Adjustment
Land	$	1,400	$	630	$	770
Building		1,800		1,184		616
Total	$	3,200	$	1,814	$	1,386

-8-

Land and Building represent Altec Lansing’s corporate headquarters which is used for the engineering, warehousing and distribution of Altec Lansing's products as well as various corporate activities. The fair value was determined by utilizing sales of comparable properties to estimate the value of Altec Lansing’s Land and Building.

As of the date of this filing, the appraisal and related procedures necessary to arrive at the fair market value of fixed assets other than Land and Building have not been completed.

d.   The following sets forth the amounts assigned to the identifiable intangible assets acquired:

(in thousands)		Fair Value		Net Book Value		Adjustment		Amortization Period
Existing technology	$	25,000	$	-	$	25,000		6 years
OEM relationships		700		-		700		7 years
Customer relationships		17,600		-		17,600		8 years
Trade name - inMotion		5,000		-		5,000		8 years
Trade name - Altec Lansing		59,100		-		59,100		Not amortized
Trademarks		-		12,502		(12,502	)
Total	$	107,400	$	12,502	$	94,898
In process technology		900		-		-		Immediate

The fair value and remaining useful life of identifiable intangible assets acquired were estimated with the assistance of an independent appraiser and in accordance with Statement of Financial Accounting Standards No. 141: Business Combinations, SFAS No. 142: Goodwill and Other Intangible Assets, and Financial Accounting Standards Board Interpretation No. 4: Applicability of SFAS No. 2 to Business Combinations Accounted for by the Purchase Method.

Existing technology represents audio products that had been introduced into the market, were generating revenue and/or had reached technological feasibility as of the close of the transaction. The value is calculated based on the present value of the future estimated cash flows derived from this technology. Existing technology is estimated to have a useful life of six years and is amortized on a straight-line basis to Selling, general and administrative expense.

The fair value of Customer relationships with original equipment manufacturers (“OEM”) and non-OEM, which includes major retailers and distributors, is calculated based on the present value of the future estimated cash flows that can be attributed to the existing OEM and Non-OEM customer relationships. Based on historical attrition rates, new customers, and technological obsolescence, the useful life of the customer relationships is estimated to be seven years for OEM Customer relationships and eight years for non-OEM Customer relationships and is amortized on a straight-line basis to Selling, general, and administrative expense.

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The value of the trade name “inMotion,” is calculated based on capitalizing the royalties saved on the use of the inMotion trade name. The inMotion trade name is relatively new and related to specific niches of the Portable Audio market. Based on product life cycles, history relating to the type of category of products for which the inMotion brand is utilized, and similar product trademarks within the retail industry, the estimated remaining useful life is determined to be eight years and is amortized on a straight-line basis to Selling, general, and administrative expense.

The value of the trade name, “Altec Lansing,” is also calculated based on capitalizing the royalties saved on the use of the Altec Lansing trade name. Considering the recognition of the brand, its long history, and management’s intent to use the brand indefinitely, the remaining useful life of the Altec Lansing name is determined to be indefinite and is being treated as an indefinite-lived asset in accordance to SFAS 142.

In-process technology involves products which fall under the definitions of research and development as defined by Statement of Financial Accounting Standards No. 2: Accounting for Research and Development Costs. Altec Lansing’s in-process technology products are at a stage of development that require further research and development to reach technological feasibility and commercial viability. The fair value is calculated based on the present value of the future estimated cash flows adjusted for the estimated cost to complete and the risk of not achieving technological feasibility. Because the in process technology, which has been valued at $0.9 million, is not yet complete and not yet generating revenue and profits, there is risk that the developments will not be completed; therefore, this amount is immediately expensed at acquisition to research and development expense.

e.   Goodwill is based on the purchase price remaining after allocating the purchase price to the fair value of tangible and intangible assets acquired less liabilities assumed.

f.   A portion of the cash consideration paid by Plantronics was to third parties to extinguish certain pre-existing debt in accordance with the Merger Agreement.

g.   The following table represents the adjustments made to certain tax related accounts as a result of the acquisition of Altec Lansing:

(in thousands)	Tax Adjustment
Increase to Deferred tax asset	879
Increase to Deferred tax liability	18,111
Decrease to Income tax payable	(2,539	)

The Deferred tax asset account increased due to the tax effect arising from temporary differences between the book and tax basis of certain account balances. The Deferred tax liability increased due to the revaluation of tangible and intangible assets not deductible for tax purposes. The tax payable was adjusted for the reassessment of potential liabilities netted against the benefit for stock options exercised at the close of the acquisition.

h.   To eliminate Minority interest, Common shares, Paid in capital and Retained earnings of Altec Lansing due to the acquisition which has been accounted for in accordance with the purchase method of accounting for business combinations. Retained earning was also adjusted for the non-recurring in-process technology charge of $0.9 million.

i.   Represents Prepaid compensation of $1.1 million incurred to retain certain Altec Lansing employees, which will be recognized over the requisite service period of 2 years.  The $1.1 million has been classified into the following accounts:

(in thousands)
Adjustment to Other current assets	$	381
Adjustment to Other assets		686
Total Adjustment relating to Prepaid compensation	$	1,067

       

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NOTE 3. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2005

The following adjustments have been reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended March 31, 2005:

a.   Estimated fair value of identifiable intangible assets acquired is amortized based on a straight line basis as described in Note 2d. The adjustment to reflect pro forma amortization expense is as follows:

(in thousands)
Existing technology	$	4,167
Customer relationships		2,300
Trade name - inMotion		625
Adjustment to Selling, general and administrative expense		7,092

Because of the risk that the In-process technology valued at $0.9 million may not be completed, the amount will be fully written off in the period immediately subsequent to the acquisition. This non-recurring expense has not been reflected in the Pro Forma Condensed Combined Statement of Operations because of its non-recurring nature. See Note 2d.

b.   To revise depreciation expense based on the fair market value of acquired Building.

c.   To reduce Interest income and increase Interest expense due to the assumed reduction in the marketable securities balance and increase in the Line of credit as a result of cash used to consummate the Altec Lansing acquisition. The increase in interest expense is determined based on the assumption that the $45 million borrowed under the Line of credit to finance the acquisition will be repaid ratably over the 12 months following the close of the acquisition.  The interest rates used to determine this interest expense adjustment ranged from 4.4% to 5.0%. The adjustment to reflect the Interest income/expense is as follows:

(in thousands)
Decrease in Interest income	$	(3,740	)
Increase in Interest expense		(1,270	)
Net interest income (expense) adjustment	$	(5,010	)

d.   To reclass design costs from Cost of revenues to research and development expense to conform to a classification consistent with that of Plantronics.

e.   To reverse interest charged on certain debt of Altec Lansing that was paid down as a result of the acquisition.

f.   To adjust pro forma Income tax expense for the net tax effect of the pro forma adjustments.

g.   To expense a share of the Prepaid compensation described in Note 2i.

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NOTE 4. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2005

The following adjustments have been reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended June 30, 2005:

a.   The estimated fair value of identifiable intangible assets acquired is amortized based on a straight line basis as described in Note 2d. The adjustment to reflect pro forma amortization expense is as follows:

(in thousands)
Existing technology	$	1,042
Customer relationships		575
Trade name - inMotion		156
Total adjustment to Selling, general, and administrative expense	$	1,773

Because of the risk that the In-process technology valued at $0.9 million may not be completed, the amount will be fully written off in the period immediately subsequent to the acquisition. This non-recurring expense has not been reflected in the Pro Forma Condensed Combined Financial Statements because of its non-recurring nature. See Note 2d.

b.   To revise Depreciation expense based on the fair market value of acquired Building.

c.   To reduce Interest income due to the assumed reduction in the marketable securities balance as a result of cash used to consummate the Altec Lansing acquisition. There is no incremental interest expense based on the assumption that the $45 million borrowed under the Line of credit to finance the acquisition will be repaid ratably over the 12 months following the close of the acquisition.  The adjustment to reflect the Interest income/expense is as follows:

(in thousands)
Decrease in Interest income	$	(935	)
Increase in Interest expense		-
Net interest income (expense) adjustment	$	(935	)

d.   To reclass design costs from Cost of revenues to Research and development expense to conform to a classification consistent with that of Plantronics.

e.   To reverse interest charged on certain debt that was paid down as a result of the acquisition.

f.   To adjust pro forma income tax expense for the tax effect of the pro forma adjustments.

g.   To expense a share of the Prepaid compensation described in Note 2i.

-12-

NOTE 5. FUTURE AMORTIZATION OF SIGNIFICANT ASSETS ACQUIRED

The following table presents future amortization associated with certain significant assets acquired:

(in thousands)		Fair Value	Amortization Period			Remainder of 2006		2007		2008		2009		2010		Thereafter
Existing technology	$	25,000		6 years	$	2,603	$	4,167	$	4,167	$	4,167		4,167	$	5,729
Customer relationships - OEM		700		7 years		63		100		100		100		100		237
Customer relationships - Non-OEM		17,600		8 years		1,375		2,200		2,200		2,200		2,200		7,425
Trade name - inMotion		5,000		8 years		391		625		625		625		625		2,109
Trade name - Altec Lansing		59,100		Not amortized		-		-		-		-		-		-
Goodwill		42,331		Not amortized		-		-		-		-		-		-
Capitalized profit in inventory		4,604		Over inv. turns *		4,604
Building step-up		617		10 Years		38		62		62		62		62		331
Prepaid compensation		1,067		2 Years		238		571		258		-		-		-
					$	9,312	$	7,725	$	7,412	$	7,154	$	7,154	$	15,831

* Represents the manufacturing profit capitalized to inventory as a result of the application of purchase accounting to the acquisition of Altec Lansing and will decrease gross margin until all acquired Work-in-process and Finished goods inventory is sold, which is expected to occur by December 31, 2005. The profit capitalized to inventory has been specifically excluded from the pro forma statements of operations presented herein as it represents a non recurring item.