exhibit_99-1.htm

PRESS RELEASE

FOR INFORMATION, CONTACT:

Greg Klaben

Vice President of Investor Relations

(831) 458-7533

FOR RELEASE at 1 P.M. PST

May 5, 2009

Plantronics Announces Fourth Quarter and Fiscal 2009 Results

Fourth Quarter Revenue and Operating Results Exceed Guidance

SANTA CRUZ, CA – May 5, 2009 - Plantronics, Inc. (NYSE: PLT) today announced fourth quarter fiscal 2009 net revenues of $146.8 million compared with $208.7 million in the fourth quarter of fiscal 2008. The Company’s GAAP operating loss for the quarter was $11.4 million compared with a GAAP operating income of $19.0 million in the fourth quarter of the prior year. The non-GAAP operating income for the quarter was $3.7 million compared with non-GAAP operating income of $25.7 million in the fourth quarter last year. Plantronics' GAAP loss per share was $0.23 in the fourth quarter of fiscal 2009 compared with diluted earnings per share of $0.36 in the same quarter of the prior year. Non-GAAP diluted earnings per share for the current quarter was $0.01 compared with $0.46 in the fourth quarter of fiscal 2008. The difference between GAAP and non-GAAP operating income and earnings per share for the current quarter includes restructuring and other related costs, purchase accounting amortization and the cost of stock-based compensation.

Net revenues for fiscal year 2009 were $765.6 million, a decrease of approximately 11% compared with $856.3 million for fiscal year 2008. The GAAP operating loss for fiscal 2009 was $81.2 million compared with GAAP operating income of $79.4 million in the prior year. Non-GAAP operating income declined from $107.6 million in fiscal 2008 to $70.3 million for fiscal 2009, a decrease of approximately 35%. The Company’s GAAP loss per share was $1.34 for fiscal year 2009 compared with diluted earnings per share of $1.39 in the prior fiscal year. The Company’s non-GAAP diluted earnings per share was $1.02 for fiscal year 2009 compared with $1.80 in the prior fiscal year.

“We are beginning to see signs of stabilization in many parts of our business and are encouraged that demand for our products was stronger than we forecasted for the quarter. During the last several months, we took significant steps to reduce costs and improve efficiencies, and we now believe our cost structure is aligned with current market conditions,” stated Ken Kannappan, President & CEO. “We are entering fiscal year 2010 with a strong balance sheet, a lean cost structure and a better competitive position. We are committed to executing on our goals for fiscal year 2010 to win in Unified Communications and to improve profitability and return on invested capital from their current levels.”

Audio Communications Group (ACG) Non-GAAP Results

(Office & Contact Center, Mobile, Gaming and Computer & Clarity)

Comparisons are to the Same Quarter in the Prior Year

Fourth quarter fiscal 2009 net revenues of $128.1 million were down 31% compared with $185.4 million in the prior year quarter. General economic weakness led to revenue declines in all major geographies and product groups. Office and Contact Center revenue was $85.6 million, down 32%; Bluetooth headset revenue was $28.7 million, down 31%; and Gaming & Computer products revenue was $6.9 million, down 18%.

Gross margin in the fourth quarter of fiscal 2009 was 39.2% compared with 45.6% in the fourth quarter last year. The lower gross margin was primarily due to higher provisions for excess and obsolete inventory primarily from Bluetooth products, lower rates of factory utilization, and unfavorable foreign exchange impact offset in part by improved product margins. Operating expenses declined by 24% from $54.9 million to $41.9 million and were lower in all functions. Operating income decreased to $8.4 million from $29.7 million, and the operating margin was 6.5% compared with 16.0% in the prior year quarter.

The Company continues to believe that the implementation of Unified Communications (“UC”) technologies by large corporations will be a significant long-term driver of office headset adoption, and, as a result, a key long-term driver of revenue and profit growth. During the quarter, the Company disclosed that it expects an incremental revenue opportunity from Unified Communications of $350 million annually by fiscal 2015.

“We’ve had important wins in UC for large enterprise customers and continue to see growing adoption of UC,” stated Kannappan.

Audio Entertainment Group (AEG) Non-GAAP Results

(Docking Audio, PC Audio, Other)

Comparisons are to the Same Quarter in the Prior Year

Fourth quarter fiscal 2009 net revenues of $18.7 million were down 20% from $23.4 million in the prior year quarter driven by continued global weakness in consumer spending, a product mix shift toward lower priced products in addition to a negative foreign exchange impact. As a result, all product line revenues were down versus the prior year quarter despite better product placements. Domestic revenues were down 5% while international revenues were down 34% as a result of weak international retail sales.

Gross margin declined from $4.5 million, or 19.4%, in the prior year quarter to $1.0 million, or 5.3%, in the current year quarter as a result of a product mix shift to lower margin products, reduced sales of previously reserved items and an unfavorable exchange rate impact.

Operating expenses declined by 33% from $8.5 million in the prior year quarter to $5.7 million in the current quarter; and the operating loss increased from $4.0 million to $4.7 million.

Business Outlook

The following statements are based on current expectations. As described in “Safe Harbor” below, many of these statements are forward-looking. Actual results are subject to a variety of risks and uncertainties and may differ materially from the forward-looking statements.

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Plantronics has a “book and ship” business model whereby it ships most orders to customers within 48 hours of our receipt of those orders, and therefore the Company cannot rely on the level of backlog to provide visibility into potential future revenues. The business is inherently difficult to forecast, and there can be no assurance that the incoming orders Plantronics expects to receive over the balance of the quarter will materialize. With increasing economic uncertainty, the Company’s business is even more difficult to forecast than usual.

Revenues in the first quarter of fiscal year 2010 are expected to be similar to the fourth quarter of fiscal year 2009, ranging from slightly below to slightly above the reported net revenues of $146.8 million. Gross margins are expected to improve by several points sequentially, primarily as a result of lower provisions for excess and obsolete inventory. On January 14, 2009 and March 26, 2009, the Company announced a series of actions to lower its cost structure and improve efficiencies. The measures announced in the fourth quarter were expected to bring total non-GAAP operating expenses down to approximately $195 million in fiscal year 2010 and while the fourth quarter fiscal year 2009 run rate was slightly lower than that, the Company is continuing to target approximately $195 million in non-GAAP operating expenses in fiscal 2010.

Subject to the foregoing, we are currently expecting the following range of financial results for the first quarter of fiscal year 2010:

·	Net revenues of $145 - $150 million;

·	Non-GAAP earnings per share of $0.08 - $0.12;

·	Non-GAAP consolidated tax rate to be approximately 28%;

·	The EPS cost of purchase accounting amortization of approximately $0.01;

·	The EPS cost of equity compensation pursuant to FAS 123(R) to be approximately $0.05; and

·	A small GAAP loss per share. GAAP loss per share is not estimable due to tax rate and restructuring charge uncertainties.

Plantronics does not intend to update these targets during the quarter or to report on its progress toward these targets. Plantronics will not comment on these targets to analysts or investors except by its next press release announcing its first quarter fiscal year 2010 results or by other public disclosure. Any statements by persons outside Plantronics speculating on the progress of the first quarter fiscal year 2010 will not be based on internal company information and should be assessed accordingly by investors.

Conference Call Scheduled to Discuss Actual Financial Results

Plantronics has scheduled a conference call to discuss fourth quarter results. The conference call will take place Tuesday, May 5 at 2:00 PM (PDT). 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." Participants from North America should call (888) 301-8736 and other participants should call (706) 634-7260.

A replay of the call with the conference ID #86162125 will be available for 72 hours at (800) 642-1687 for callers from North America and at (706) 645-9291 for all other callers. The conference call will also be simultaneously web cast at www.plantronics.com under Investor Relations, and the web cast of the conference call will remain available at the Plantronics Web site for thirty days.

Use of Non-GAAP Financial Information

Plantronics excludes non-recurring transactions and non-cash expenses and charges such as restructuring and other related charges, certain tax credits and the release of certain tax reserves, stock-based compensation expenses related to stock options, awards and employee stock purchases, purchase accounting amortization and goodwill and long-lived asset impairment charges from non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income, non-GAAP operating margin and non-GAAP effective tax rate. Plantronics excludes these expenses from its non-GAAP measures primarily because Plantronics does not believe they are reflective of ongoing operating results and are not part of its target operating model. Plantronics believes that the use of non-GAAP financial measures provides meaningful supplemental information regarding its performance and liquidity, and helps investors compare actual results to its long-term target operating model goals. Plantronics believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning, forecasting and analyzing future periods.

SAFE HARBOR

This release contains forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to (i) our restructuring plan, (ii) our expectations that our non-GAAP operating expenses will be approximately $195 million for fiscal year 2010, (iii) our objective to maintain our profitability, be cash flow positive, increase our return on invested capital, and increase our competitive position, (iv) our ability to continue to focus on certain strategic initiatives, (v) the future of UC technologies, including their implementation, growth in deployments, the effect on headset adoption, and our expectation that our revenue opportunity from UC will be $350 million annually by fiscal year 2015, (vi) our position in the UC market, (vii) our estimate of revenue for the first quarter of fiscal year 2010, and our statement that revenues will be slightly down or slightly up and gross margins will improve, and (viii) our estimate of GAAP and non-GAAP financial results for the first quarter of fiscal year 2010 and related components of earnings (loss) per share, as well as other matters discussed in this press release that are not purely historical data. Plantronics does 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:

·	Economic conditions in both the domestic and international markets;

·	Work disruptions, factory or other facility closures, border closures or delays, transportation interference or delays, or perceptions that our product may make people sick related to the H1N1 “swine flu” illness in Mexico or other places in the world;

·	Fluctuations in foreign exchange rates;

·	The bankruptcy of distributors or key customers, or the bankruptcy of or reduction in capacity of our key suppliers;

·	The effect of additional actions on GAAP results;

·	Failure to match production to demand given long lead times and the difficulty of forecasting unit volumes and acquiring the component parts to meet demand without having excess inventory or incurring cancellation charges;

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·	We have significant intangible assets and goodwill recorded on our balance sheet. If the carrying value of our intangible assets and goodwill is not recoverable, additional impairment losses must be recognized which would adversely affect our financial results;

·	We have experienced volatility in prices from our suppliers, including our manufacturers located in China, this volatility could negatively affect profitability and/or market share; and

Additional risk factors include: interruption in the supply of sole-sourced critical components, continuity of component supply at costs consistent with our plans, the inherent risks of our substantial foreign operations, and problems which might affect our manufacturing facilities in Mexico, and unexpected delays and uncertainties affecting our ability to realize targeted expense reductions and annualized savings through implementation of our plan to outsource the manufacturing of our Bluetooth products in China to GoerTek, Inc.

For more information concerning these and other possible risks, please refer to the Company’s Annual Report on Form 10-K filed May 27, 2008, quarterly reports filed on Form 10-Q and other filings with the Securities and Exchange Commission as well as recent press releases. These filings can be accessed over the Internet at http://www.sec.gov/edgar/searchedgar/companysearch.html.

Financial Summaries

The following related charts are provided:

·	Summary Unaudited Condensed Consolidated Financial Statements

·	Summary Unaudited Condensed Statements of Operations by Segment

·	Unaudited GAAP to Non-GAAP Statements of Operations Reconciliations for the three and twelve months ended March 31, 2009 and March 31, 2008

·	Summary Unaudited Statements of Operations and Related Data on a Non-GAAP Basis

About Plantronics

In 1969, a Plantronics headset carried the historic third words from the moon: “That’s one small step for man, one giant leap for mankind.” Since then, Plantronics has become the headset of choice for mission-critical applications such as air traffic control, 911 dispatch, and the New York Stock Exchange. Today, this history of Sound Innovation® is the basis for every product we build for the office, contact center, personal mobile, entertainment and residential markets. The Plantronics family of brands includes Plantronics, Altec Lansing, Clarity, and Volume Logic. For more information, go to www.plantronics.com or call (800) 544-4660.

Altec Lansing, Clarity, Plantronics, Sound Innovation, Volume Logic and AudioIQ are trademarks or registered trademarks of Plantronics, Inc. All other trademarks are the property of their respective owners.

###

PLANTRONICS, INC. / 345 Encinal Street / P.O. Box 1802 / Santa Cruz , California 95061-1802

831-426-6060 / Fax 831-426-6098

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PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data and percentages)

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended						Year Ended
	March 31,						March 31,
	2008			2009			2008			2009

Net revenues	$	208,743		$	146,763		$	856,286		$	765,619
Cost of revenues		121,397			96,252			507,181			469,591
Gross profit		87,346			50,511			349,105			296,028
Gross profit %		41.8	%		34.4	%		40.8	%		38.7	%

Research, development and engineering		18,978			14,852			76,982			72,061
Selling, general and administrative		48,680			36,256			189,156			175,601
Restructuring and other related charges		702			10,791			3,584			12,074
Impairment of goodwill and long-lived assets		-			-			-			117,464
Total operating expenses		68,360			61,899			269,722			377,200
Operating income (loss)		18,986			(11,388	)		79,383			(81,172	)
Operating income (loss) %		9.1	%		(7.8	%)		9.3	%		(10.6	%)

Interest and other income (expense), net		543			(415	)		5,854			(3,544	)
Income (loss) before income taxes		19,529			(11,803	)		85,237			(84,716	)
Income tax expense (benefit)		1,739			(771	)		16,842			(19,817	)
Net income (loss)	$	17,790		$	(11,032	)	$	68,395		$	(64,899	)

% of net revenues		8.5	%		(7.5	%)		8.0	%		(8.5	%)

Basic earnings (loss) per common share	$	0.37		$	(0.23	)	$	1.42		$	(1.34	)
Diluted earnings (loss) per common share	$	0.36		$	(0.23	)	$	1.39		$	(1.34	)

Shares used in basic per share calculations		48,597			48,431			48,232			48,589
Shares used in diluted per share calculations		48,994			48,431			49,090			48,589

Tax rate		8.9	%		6.5	%		19.8	%		23.4	%

UNAUDITED CONSOLIDATED BALANCE SHEETS
	March 31,			March 31,
	2008			2009
ASSETS
Cash and cash equivalents	$	163,091		$	158,193
Short-term investments		-			59,987
Total cash, cash equivalents, and short-term investments		163,091			218,180
Accounts receivable, net		131,493			83,657
Inventory, net		127,088			119,296
Deferred income taxes		13,760			12,486
Other current assets		14,771			29,936
Total current assets		450,203			463,555
Long-term investments		25,136			23,718
Property, plant and equipment, net		98,530			95,719
Intangibles, net		91,511			26,575
Goodwill		69,171			14,005
Other assets		6,842			9,548
	$	741,393		$	633,120
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	47,896		$	32,827
Accrued liabilities		67,318			53,143
Total current liabilities		115,214			85,970
Deferred tax liability		32,570			8,085
Long-term income taxes payable		14,137			12,677
Other long-term liabilities		852			1,021
Total liabilities		162,773			107,753
Stockholders' equity		578,620			525,367
	$	741,393		$	633,120

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AUDIO COMMUNICATIONS GROUP
SUMMARY CONDENSED FINANCIAL STATEMENTS
(in thousands except percentages)

UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended						Year Ended
	March 31,						March 31,
	2008			2009			2008			2009

Net revenues	$	185,361		$	128,098		$	747,935		$	674,590
Cost of revenues		101,647			78,500			403,863			382,659
Gross profit		83,714			49,598			344,072			291,931
Gross profit %		45.2	%		38.7	%		46.0	%		43.3	%

Research, development and engineering		16,211			13,119			65,733			63,840
Selling, general and administrative		42,044			31,791			163,173			155,678
Restructuring and other related charges		-			10,664			-			10,952
Total operating expenses		58,255			55,574			228,906			230,470
Operating income (loss)	$	25,459		$	(5,976	)	$	115,166		$	61,461
Operating income (loss) %		13.7	%		(4.7	%)		15.4	%		9.1	%


AUDIO ENTERTAINMENT GROUP
SUMMARY CONDENSED FINANCIAL STATEMENTS
(in thousands except percentages)

UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended						Year Ended
	March 31,						March 31,
	2008			2009			2008			2009

Net revenues	$	23,382		$	18,665		$	108,351		$	91,029
Cost of revenues		19,750			17,752			103,318			86,932
Gross profit		3,632			913			5,033			4,097
Gross profit %		15.5	%		4.9	%		4.6	%		4.5	%

Research, development and engineering		2,767			1,733			11,249			8,221
Selling, general and administrative		6,636			4,465			25,983			19,923
Restructuring and other related charges		702			127			3,584			1,122
Impairment of goodwill and long-lived assets		-			-			-			117,464
Total operating expenses		10,105			6,325			40,816			146,730
Operating loss	$	(6,473	)	$	(5,412	)	$	(35,783	)	$	(142,633	)
Operating loss %		(27.7	%)		(29.0	%)		(33.0	%)		(156.7	%)

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PLANTRONICS, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data and percentages)

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended										Year Ended
	March 31, 2009										March 31, 2009
	GAAP			Excluded				Non-GAAP			GAAP			Excluded				Non-GAAP

Net revenues	$	146,763		$	-			$	146,763		$	765,619		$	-			$	765,619
Cost of revenues		96,252			(735	)	(1)		95,517			469,591			(5,739	)	(1)		463,852
Gross profit		50,511			735				51,246			296,028			5,739				301,767
Gross profit %		34.4	%						34.9	%		38.7	%						39.4	%

Research, development and engineering		14,852			(914	)	(1)		13,938			72,061			(3,842	)	(1)		68,219
Selling, general and administrative		36,256			(2,623	)	(1)		33,633			175,601			(12,384	)	(1)		163,217
Restructuring and other related charges		10,791			(10,791	)	(2)		-			12,074			(12,074	)	(2)		-
Impairment of goodwill and long-lived assets		-			-				-			117,464			(117,464	)	(3)		-
Total operating expenses		61,899			(14,328	)			47,571			377,200			(145,764	)			231,436
Operating income (loss)		(11,388	)		15,063				3,675			(81,172	)		151,503				70,331
Operating income (loss) %		(7.8	%)						2.5	%		(10.6	%)						9.2	%

Interest and other income (expense), net		(415	)		-				(415	)		(3,544	)		-				(3,544	)
Income (loss) before income taxes		(11,803	)		15,063				3,260			(84,716	)		151,503				66,787
Income tax expense (benefit)		(771	)		3,485		(4)		2,714			(19,817	)		37,224		(5)		17,407
Net income (loss)	$	(11,032	)	$	11,578			$	546		$	(64,899	)	$	114,279			$	49,380

% of net revenues		(7.5	%)						0.4	%		(8.5	%)						6.4	%

Diluted earnings (loss) per common share	$	(0.23	)	$	0.24			$	0.01		$	(1.34	)	$	2.35			$	1.02
Shares used in diluted per share calculations		48,431			48,431				48,431			48,589			48,589				48,589


AUDIO COMMUNICATIONS GROUP
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands except percentages)

UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended										Year Ended
	March 31, 2009										March 31, 2009
	GAAP			Excluded				Non-GAAP			GAAP			Excluded				Non-GAAP

Net revenues	$	128,098		$	-			$	128,098		$	674,590		$	-			$	674,590
Cost of revenues		78,500			(666	)	(1)		77,834			382,659			(3,215	)	(1)		379,444
Gross profit		49,598			666				50,264			291,931			3,215				295,146
Gross profit %		38.7	%						39.2	%		43.3	%						43.8	%

Research, development and engineering		13,119			(872	)	(1)		12,247			63,840			(3,687	)	(1)		60,153
Selling, general and administrative		31,791			(2,162	)	(1)		29,629			155,678			(9,551	)	(1)		146,127
Restructuring and other related charges		10,664			(10,664	)	(2)		-			10,952			(10,952	)	(2)		-
Total operating expenses		55,574			(13,698	)			41,876			230,470			(24,190	)			206,280
Operating income (loss)	$	(5,976	)	$	14,364			$	8,388		$	61,461		$	27,405			$	88,866
Operating income (loss) %		(4.7	%)						6.5	%		9.1	%						13.2	%


AUDIO ENTERTAINMENT GROUP
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands except percentages)

UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended										Year Ended
	March 31, 2009										March 31, 2009
	GAAP			Excluded				Non-GAAP			GAAP			Excluded				Non-GAAP

Net revenues	$	18,665		$	-			$	18,665		$	91,029		$	-			$	91,029
Cost of revenues		17,752			(69	)	(1)		17,683			86,932			(2,524	)	(1)		84,408
Gross profit		913			69				982			4,097			2,524				6,621
Gross profit %		4.9	%						5.3	%		4.5	%						7.3	%

Research, development and engineering		1,733			(42	)	(1)		1,691			8,221			(155	)	(1)		8,066
Selling, general and administrative		4,465			(461	)	(1)		4,004			19,923			(2,833	)	(1)		17,090
Restructuring and other related charges		127			(127	)	(2)		-			1,122			(1,122	)	(2)		-
Impairment of goodwill and long-lived assets		-			-				-			117,464			(117,464	)	(3)		-
Total operating expenses		6,325			(630	)			5,695			146,730			(121,574	)			25,156
Operating loss	$	(5,412	)	$	699			$	(4,713	)	$	(142,633	)	$	124,098			$	(18,535	)
Operating loss %		(29.0	%)						(25.3	%)		(156.7	%)						(20.4	%)

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(1) Excluded amount represents stock-based compensation and purchase accounting amortization.

(2) Excluded amount represents restructuring and other related charges.

(3) Excluded amount represents impairment of goodwill and long-lived assets.

(4) Excluded amount represents tax benefit from stock-based compensation, purchase accounting amortization, and restructuring and other related charges.

(5) Excluded amount represents tax benefit from stock-based compensation, purchase accounting amortization, restructuring and other related charges, impairment of goodwill and long-lived assets and $3,813 related to a tax benefit from expiration of certain statutes of limitations.

Use of Non-GAAP Financial Information

To supplement our consolidated financial statements presented on a GAAP basis, Plantronics uses non-GAAP measures of operating results, which are adjusted to exclude non-recurring and non-cash expenses and charges, such as restructuring and other related charges, certain tax credits and the release of certain tax reserves, stock-based compensation expenses related to stock options, awards and employee stock purchases under FAS 123(R), purchase accounting amortization and impairment of goodwill and long-lived assets. Plantronics does not believe these expenses and charges are reflective of ongoing operating results and are not part of our target operating model. At the segment level, we have presented non-GAAP statements that only show our results to the operating income line. On a consolidated basis, we have presented full non-GAAP statement of operations. The non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and the reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

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PLANTRONICS, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data and percentages)

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended										Year Ended
	March 31, 2008										March 31, 2008
	GAAP			Excluded				Non-GAAP			GAAP			Excluded				Non-GAAP

Net revenues	$	208,743		$	-			$	208,743		$	856,286		$	-			$	856,286
Cost of revenues		121,397			(1,779	)	(1)		119,618			507,181			(7,727	)	(2)		499,454
Gross profit		87,346			1,779				89,125			349,105			7,727				356,832
Gross profit %		41.8	%						42.7	%		40.8	%						41.7	%

Research, development and engineering		18,978			(962	)	(1)		18,016			76,982			(3,756	)	(1)		73,226
Selling, general and administrative		48,680			(3,312	)	(1)		45,368			189,156			(13,125	)	(1)		179,031
Restructuring and other related charges		702			(702	)	(3)		-			3,584			(3,584	)	(3)		-
Total operating expenses		68,360			(4,976	)			63,384			269,722			(20,465	)			249,257
Operating income		18,986			6,755				25,741			79,383			28,192				107,575
Operating income %		9.1	%						12.3	%		9.3	%						12.6	%

Interest and other income, net		543			-				543			5,854			-				5,854
Income before income taxes		19,529			6,755				26,284			85,237			28,192				113,429
Income tax expense		1,739			2,123		(4)		3,862			16,842			8,447		(5)		25,289
Net income	$	17,790		$	4,632			$	22,422		$	68,395		$	19,745			$	88,140

% of net revenues		8.5	%						10.7	%		8.0	%						10.3	%

Diluted earnings per common share	$	0.36		$	0.09			$	0.46		$	1.39		$	0.40			$	1.80
Shares used in diluted per share calculations		48,994			48,994				48,994			49,090			49,090				49,090


AUDIO COMMUNICATIONS GROUP
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands except percentages)

UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended										Year Ended
	March 31, 2008										March 31, 2008
	GAAP			Excluded				Non-GAAP			GAAP			Excluded				Non-GAAP

Net revenues	$	185,361		$	-			$	185,361		$	747,935		$	-			$	747,935
Cost of revenues		101,647			(870	)	(1)		100,777			403,863			(3,272	)	(1)		400,591
Gross profit		83,714			870				84,584			344,072			3,272				347,344
Gross profit %		45.2	%						45.6	%		46.0	%						46.4	%

Research, development and engineering		16,211			(931	)	(1)		15,280			65,733			(3,624	)	(1)		62,109
Selling, general and administrative		42,044			(2,443	)	(1)		39,601			163,173			(9,621	)	(1)		153,552
Total operating expenses		58,255			(3,374	)			54,881			228,906			(13,245	)			215,661
Operating income	$	25,459		$	4,244			$	29,703		$	115,166		$	16,517			$	131,683
Operating income %		13.7	%						16.0	%		15.4	%						17.6	%


AUDIO ENTERTAINMENT GROUP
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands except percentages)

UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended										Year Ended
	March 31, 2008										March 31, 2008
	GAAP			Excluded				Non-GAAP			GAAP			Excluded				Non-GAAP

Net revenues	$	23,382		$	-			$	23,382		$	108,351		$	-			$	108,351
Cost of revenues		19,750			(909	)	(1)		18,841			103,318			(4,455	)	(2)		98,863
Gross profit		3,632			909				4,541			5,033			4,455				9,488
Gross profit %		15.5	%						19.4	%		4.6	%						8.8	%

Research, development and engineering		2,767			(31	)	(1)		2,736			11,249			(132	)	(1)		11,117
Selling, general and administrative		6,636			(869	)	(1)		5,767			25,983			(3,504	)	(1)		22,479
Restructuring and other related charges		702			(702	)	(3)		-			3,584			(3,584	)	(3)		-
Total operating expenses		10,105			(1,602	)			8,503			40,816			(7,220	)			33,596
Operating loss	$	(6,473	)	$	2,511			$	(3,962	)	$	(35,783	)	$	11,675			$	(24,108	)
Operating loss %		(27.7	%)						(16.9	%)		(33.0	%)						(22.2	%)

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(1) Excluded amount represents stock-based compensation and purchase accounting amortization.

(2) Excluded amount represents stock-based compensation, purchase accounting amortization and $517 related to the impairment of a long-lived asset.

(3) Excluded amount represents restructuring and other related charges.

(4) Excluded amount represents tax benefit from stock-based compensation, purchase accounting amortization and restructuring and other related charges.

(5) Excluded amount represents tax benefit from stock-based compensation, purchase accounting amortization, restructuring and other related charges and impairment of a long-lived asset.

Use of Non-GAAP Financial Information

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Summary of Unaudited Statements of Operations and Related Data (1) (in thousands, except per share data and percentages)

		Q108			Q208			Q308			Q408		FY08				Q109			Q209			Q309			Q409		FY09
Net revenues	$	206,495		$	208,224		$	232,824		$	208,743		$	856,286		$	219,164		$	216,856		$	182,836		$	146,763		$	765,619
Cost of revenues		121,107			121,438			137,291			119,618			499,454			126,464			121,290			120,581			95,517			463,852
Gross profit		85,388			86,786			95,533			89,125			356,832			92,700			95,566			62,255			51,246			301,767
Gross profit %		41.4	%		41.7	%		41.0	%		42.7	%		41.7	%		42.3	%		44.1	%		34.0	%		34.9	%		39.4	%

Research, development and engineering		18,509			18,302			18,399			18,016			73,226			18,660			17,811			17,810			13,938			68,219
Selling, general and administrative		42,776			42,868			45,019			45,368			176,031			44,980			44,333			40,271			33,633			163,217
Operating expenses		61,285			61,170			63,418			63,384			249,257			63,640			62,144			58,081			47,571			231,436

Operating income		24,103			25,616			32,115			25,741			107,575			29,060			33,422			4,174			3,675			70,331
Operating income %		11.7	%		12.3	%		13.8	%		12.3	%		12.6	%		13.3	%		15.4	%		2.3	%		2.5	%		9.2	%

Income before income taxes		25,437			27,409			34,299			26,284			113,429			30,600			30,252			2,675			3,260			66,787
Income tax expense (benefit)		6,391			6,864			8,172			3,862			25,289			7,339			8,692			(1,338	)		2,714			17,407
Income tax expense (benefit) as a percent
of income before taxes		25.1	%		25.0	%		23.8	%		14.7	%		22.3	%		24.0	%		28.7	%		(50.0	%)		83.3	%		26.1	%

Net income	$	19,046		$	20,545		$	26,127		$	22,422		$	88,140		$	23,261		$	21,560		$	4,013		$	546		$	49,380
Diluted shares outstanding		48,681			49,310			49,533			48,994			49,090			49,245			49,489			48,449			48,431			48,589
Diluted EPS	$	0.39		$	0.42		$	0.53		$	0.46		$	1.80		$	0.47		$	0.44		$	0.08		$	0.01		$	1.02

Net revenues from unaffiliated customers:
Audio Communication Group
Office and Contact Center	$	132,205		$	131,357		$	131,017		$	125,379		$	519,958		$	122,803		$	119,530		$	101,694		$	85,642		$	429,669
Mobile		41,238			35,859			48,788			45,995			171,880			59,882			60,911			36,011			30,615			187,419
Gaming and Computer Audio		6,485			8,277			10,449			8,401			33,612			9,621			8,977			8,531			6,923			34,052
Other		5,644			5,554			5,701			5,586			22,485			6,221			5,931			6,380			4,918			23,450
Audio Entertainment Group		20,923			27,177			36,869			23,382			108,351			20,637			21,507			30,220			18,665			91,029


Net revenues by geographic area
from unaffiliated customers:
Domestic	$	131,108		$	126,399		$	139,106		$	124,535		$	521,148		$	134,402		$	139,856		$	107,799		$	90,182		$	472,239
International		75,387			81,825			93,718			84,208			335,138			84,762			77,000			75,037			56,581			293,380

Balance Sheet accounts and metrics:
Accounts receivable, net	$	121,705		$	128,705		$	136,550		$	131,493		$	131,493		$	130,530		$	115,032		$	106,463		$	83,657		$	83,657
Days sales outstanding		53			56			53			57						54			48			52			51
Inventory, net	$	136,253		$	133,516		$	131,320		$	127,088		$	127,088		$	136,974		$	163,433		$	137,563		$	119,296		$	119,296
Inventory turns		3.6			3.6			4.2			3.8						3.7			3.0			3.5			3.2

(1) Non-GAAP.

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