Delaware | 1-12696 | 77-0207692 |
(State or Other Jurisdiction of Incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) |
Not Applicable |
(Former name or former address, if changed since last report) |
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)) |
Date: | February 5, 2019 | PLANTRONICS, INC. | ||
By: | /s/ Pamela Strayer | |||
Name: | Pamela Strayer | |||
Title: | Executive Vice President and Chief Financial Officer |
INVESTOR CONTACT: Mike Iburg Vice President, Investor Relations (831) 458-7533 | MEDIA CONTACT: Shannon Shamoon Manager, Marketing Buzz and Brand (831) 201-9142 |
GAAP | YoY Change | Non-GAAP1 | YoY Change | |||||||||
Revenue | $501.7 | +122 | % | Revenue | $530.6 | +134 | % | |||||
GM% | 42.9 | % | -750 bps | GM% | 51.5 | % | +70 bps | |||||
Op Inc $ | ($24.7 | ) | -167 | % | Op Inc $ | $93.2 | +108 | % | ||||
Diluted EPS | ($1.06 | ) | -31 | % | Diluted EPS | $1.36 | +34 | % | ||||
Op CF | $46.7 | +59 | % | EBITDA | $105.5 | +111 | % |
Q3 FY19 Actual Results | Performance | Q3 FY19 Guidance Range2 | |
GAAP Net Revenue | $502M | Exceeded Midpoint | $481M - $511M |
Non-GAAP Net Revenue | $531M | Exceeded Midpoint | $510M - $540M |
Non-GAAP Operating Income | $93M | At High End | $79M - $94M |
Non-GAAP Diluted EPS | $1.36 | Exceeded Range | $1.10 - $1.35 |
• | Double-digit revenue growth in Desktop Phones, Audio Conferencing, UC Headsets, and Consumer Headsets. The rapid adoption of recently introduced products, such as the VVX x50 family of Open SIP desktop phones, were strong contributors to revenue growth. |
• | The Company announced Polycom Studio, the first in a family of video solutions designed specifically for huddle rooms and smaller conference rooms. This plug-and-play USB video bar delivers board-room quality to smaller meeting spaces with robust features, plug-and-play simplicity, and great value. The Company expects to announce new additions to this portfolio in the next several months. |
• | Tom Puorro has joined the Company as Executive Vice President, General Manager, Group Systems. In this role, Puorro will have responsibility for all aspects of voice and video group solutions. Puorro joins Plantronics from Cisco, where he most recently served as VP & GM of Cisco's Unified Communications Technology Group. |
• | In January 2019, the Company made a debt repayment of $50 million on its outstanding Term Loan B and expects to make an additional $50 million repayment by the end of the current March quarter. In addition, as of yesterday's close of market, the Company has repurchased 347 thousand shares of common stock at a total cost of $12.6 million since re-initiating the share repurchase program in November. |
• | As of December 31, 2018, the Company had achieved a total of $26 million in annual run-rate synergy capture. Through subsequent actions in January, the Company has captured an additional $19 million as of today's date, for a total of $45 million since the close of the Polycom acquisition. With over half of the first-year cost synergies completed to date, the Company is on track to achieve its first-year cost synergy commitment of $85M on-time and on-target. As of the most recent quarter-end, the Company's trailing twelve month EBITDA was approximately $400 million on a combined comparative basis. |
• | GAAP net revenues of $456 million to $486 million, which are expected to be reduced by $19 million due to purchase accounting adjustments. Excluding these adjustments, non-GAAP net revenues are expected to be $475 to $505 million. |
◦ | Changes in foreign currency rates are expected to negatively impact net revenue by approximately $6 million in the March quarter compared to the prior year. Excluding this impact, non-GAAP net revenues are forecasted to grow $9 million or 2% at the midpoint of the guidance range. |
• | Non-GAAP operating income of $75 million to $90 million. |
• | Assuming a non-GAAP tax rate of 19.5% to 20.5% and approximately 40 million diluted average weighted shares outstanding: |
◦ | Non-GAAP diluted EPS of $1.00 to $1.30. |
• | Micro and macro-economic conditions in our domestic and international markets; |
• | our ability to realize and achieve positive financial results projected to arise in the Enterprise market from UC&C adoption could be adversely affected by a variety of factors including the following: (i) as UC&C becomes more widely adopted, the risk that competitors will offer solutions that will effectively commoditize our products which, in turn, will reduce the sales prices for those products; (ii) our plans are dependent upon adoption of our UC&C solution by major platform providers and strategic partners such as Microsoft Corporation, Cisco Systems, Inc., Avaya, Inc., Alcatel-Lucent, and Huawei, and our influence over such providers with respect to the functionality of their platforms or their product offerings, their rate of deployment, and their willingness to integrate their platforms and product offerings with our solutions is limited; (iii) delays or limitations on our ability to timely introduce solutions that are cost effective, feature-rich, stable, and attractive to our customers within forecasted development budgets; (iv) our successful implementation and execution of new and different processes involving the design, development, and manufacturing of complex electronic systems composed of hardware, firmware, and software that works seamlessly and continuously in a wide variety of environments and with multiple devices; (v) failure of UC&C solutions generally, or our solutions in particular, to be adopted with the breadth and speed we anticipate; (vi) our sales model and expertise must successfully evolve to support complex integration of hardware, software, and services with UC&C infrastructure consistent with changing customer purchasing expectations; (vii) as UC&C becomes more widely adopted we anticipate that competition for market share will increase, particularly given that some competitors may have superior technical and economic resources; (viii) sales cycles for more complex UC&C deployments are longer as compared to our traditional Enterprise products; (ix) our inability to timely and cost-effectively adapt to changing business requirements may impact our profitability in this market and our overall margins; and (x) our failure to expand our technical support capabilities to support the complex and proprietary platforms in which our UC&C products are and will be integrated; |
• | regarding the Polycom acquisition: (i) we may be unable to integrate Polycom's business within our own in a timely and cost-efficient manner or do so without adversely impacting operations, including new product launches; (ii) expected synergies or operating efficiencies may fail to materialize in whole or part or may not occur within expected time-frames; (iii) the acquisition may adversely impact ours or Polycom's relationships with respective customers, suppliers and strategic partners and their operating results and businesses generally (including the diversion of management time on transaction-related issues); (iv) each company may be unable to retain and hire all or a portion of their respective key personnel; (v) legal and regulatory enforcement matters that are pending at Polycom may adversely impact the results of the combined company; (vi) our increased leverage as a result of the transaction will be substantially greater than prior to the acquisition which may pose risks, including reduced flexibility to make changes in our operations in response to business or economic conditions, increased borrowing costs, as well as penalties or costs should we fail to comply with terms of the financial agreements such as debt ratios and financial and operation performance targets; (vii) negative effects on the market price of our common stock as a result of the transaction, particularly in light of the issuance of our stock in the transaction; (viii) our financial reporting including those resulting from the adoption of new accounting pronouncements and associated system implementations in the context of the transaction, our ability to forecast financial results of the combined company and that we may be unable to successfully integrate our reporting system causing an adverse impact to our ability to make timely and accurate filings with the SEC and other domestic and foreign governmental agencies; (ix) the potential impact of the transaction on our future tax rate and payments based on the consolidation global entity and our ability to quickly integrate foreign operations; (x) the challenges of integrating the supply chains of the two companies; and (xi) the potential that our due diligence did not uncover risks and potential liabilities of Polycom; |
• | failure to match production to demand given long lead times and the difficulty of forecasting unit volumes and acquiring the component parts and materials to meet demand without having excess inventory or incurring cancellation charges; |
• | volatility in prices from our suppliers, including our manufacturers located in China, have in the past and could in the future negatively affect our profitability and/or market share; |
• | fluctuations in foreign exchange rates; |
• | new or greater tariffs on our products; |
• | with respect to our stock repurchase program, prevailing stock market conditions generally, and the price of our stock specifically; |
• | the bankruptcy or financial weakness of distributors or key customers, or the bankruptcy of or reduction in capacity of our key suppliers; |
• | additional risk factors including: interruption in the supply of sole-sourced critical components, continuity of component supply at costs consistent with our plans, and the inherent risks of our substantial foreign operations; and |
• | seasonality in one or more of our product categories. |
• |
• |
• |
• |
PLANTRONICS, INC. | |||||||||||||||||
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||||||||||
($ in thousands, except per share data) | |||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||||
Net Revenues: | |||||||||||||||||
Net product revenues | $ | 226,534 | $ | 445,441 | $ | 640,760 | $ | 1,102,012 | |||||||||
Net services revenues | — | 56,228 | — | 104,035 | |||||||||||||
Total net revenues | 226,534 | 501,669 | 640,760 | 1,206,047 | |||||||||||||
Cost of revenues: | |||||||||||||||||
Cost of product revenues | 112,409 | 259,673 | 315,720 | 676,616 | |||||||||||||
Cost of service revenues | — | 26,859 | — | 51,822 | |||||||||||||
Total cost of revenues | 112,409 | 286,532 | 315,720 | 728,438 | |||||||||||||
Gross profit | 114,125 | 215,137 | 325,040 | 477,609 | |||||||||||||
Gross profit % | 50.4 | % | 42.9 | % | 50.7 | % | 39.6 | % | |||||||||
Operating expenses: | |||||||||||||||||
Research, development, and engineering | 21,257 | 59,661 | 62,402 | 140,409 | |||||||||||||
Selling, general, and administrative | 56,196 | 168,053 | 170,125 | 406,553 | |||||||||||||
(Gain) loss, net from litigation settlements | (15 | ) | — | (295 | ) | (30 | ) | ||||||||||
Restructuring and other related charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | ||||||||||||
Total operating expenses | 77,354 | 239,844 | 234,670 | 567,643 | |||||||||||||
Operating income | 36,771 | (24,707 | ) | 90,370 | (90,034 | ) | |||||||||||
Operating income % | 16.2 | % | (4.9 | )% | 14.1 | % | (7.5 | )% | |||||||||
Interest expense | (7,341 | ) | (25,032 | ) | (21,904 | ) | (56,252 | ) | |||||||||
Other non-operating income, net | 2,490 | 125 | 5,230 | 3,731 | |||||||||||||
Income before income taxes | 31,920 | (49,614 | ) | 73,696 | (142,555 | ) | |||||||||||
Income tax expense (benefit) | 81,424 | (7,880 | ) | 84,419 | (28,583 | ) | |||||||||||
Net income (loss) | $ | (49,504 | ) | $ | (41,734 | ) | $ | (10,723 | ) | $ | (113,971 | ) | |||||
% of net revenues | (21.9 | )% | (8.3 | )% | (1.7 | )% | (9.4 | )% | |||||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | (1.54 | ) | $ | (1.06 | ) | $ | (0.33 | ) | $ | (3.08 | ) | |||||
Diluted | $ | (1.54 | ) | $ | (1.06 | ) | $ | (0.33 | ) | $ | (3.08 | ) | |||||
Shares used in computing earnings per common share: | |||||||||||||||||
Basic | 32,075 | 39,314 | 32,384 | 37,063 | |||||||||||||
Diluted | 32,075 | 39,314 | 32,384 | 37,063 | |||||||||||||
Effective tax rate | 255.1 | % | 15.9 | % | 114.6 | % | 20.1 | % |
PLANTRONICS, INC. | |||||||||
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||
($ in thousands) | |||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||||
March 31, | December 31, | ||||||||
2018 | 2018 | ||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 390,661 | $ | 328,156 | |||||
Short-term investments | 269,313 | 13,422 | |||||||
Total cash, cash equivalents, and short-term investments | 659,974 | 341,578 | |||||||
Accounts receivable, net | 152,888 | 363,837 | |||||||
Inventory, net | 68,276 | 160,219 | |||||||
Other current assets | 18,588 | 48,229 | |||||||
Total current assets | 899,726 | 913,863 | |||||||
Property, plant, and equipment, net | 142,129 | 212,138 | |||||||
Goodwill | 15,498 | 1,272,619 | |||||||
Purchased intangibles, net | — | 871,599 | |||||||
Deferred tax assets | 17,950 | 4,741 | |||||||
Other assets | 1,584 | 22,821 | |||||||
Total assets | $ | 1,076,887 | $ | 3,297,781 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Accounts payable | $ | 45,417 | $ | 146,067 | |||||
Accrued liabilities | 80,097 | 452,194 | |||||||
Total current liabilities | 125,514 | 598,261 | |||||||
Long-term debt, net of issuance costs | 492,509 | 1,727,660 | |||||||
Long-term income taxes payable | 87,328 | 93,150 | |||||||
Other long-term liabilities | 18,566 | 134,492 | |||||||
Total liabilities | 723,917 | 2,553,563 | |||||||
Stockholders' equity | 352,970 | 744,218 | |||||||
Total liabilities and stockholders' equity | $ | 1,076,887 | $ | 3,297,781 | |||||
PLANTRONICS, INC. | |||||||||||||||||
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||||||||||
($ in thousands, except per share data) | |||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net Income | $ | (49,504 | ) | $ | (41,734 | ) | $ | (10,723 | ) | $ | (113,971 | ) | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 5,151 | 55,117 | 15,894 | 142,763 | |||||||||||||
Amortization of debt issuance cost | 362 | 1,419 | 1,087 | 3,188 | |||||||||||||
Stock-based compensation | 8,029 | 11,719 | 26,047 | 30,709 | |||||||||||||
Deferred income taxes | 6,106 | (21,931 | ) | 10,490 | (39,987 | ) | |||||||||||
Provision for excess and obsolete inventories | 1,113 | 2,073 | 2,013 | 4,881 | |||||||||||||
Restructuring charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | ||||||||||||
Cash payments for restructuring charges | (482 | ) | (3,827 | ) | (2,911 | ) | (11,222 | ) | |||||||||
Other operating activities | 496 | 60 | (645 | ) | 9,070 | ||||||||||||
Changes in assets and liabilities: | |||||||||||||||||
Accounts receivable, net | (4,399 | ) | (12,075 | ) | (3,153 | ) | (35,938 | ) | |||||||||
Inventory, net | (3,733 | ) | (5,362 | ) | (9,577 | ) | 11,018 | ||||||||||
Current and other assets | 1,473 | 33,149 | (3,066 | ) | 30,456 | ||||||||||||
Accounts payable | (422 | ) | (4,108 | ) | 2,783 | 16,519 | |||||||||||
Accrued liabilities | (6,307 | ) | 33,172 | (15,695 | ) | 72,677 | |||||||||||
Income taxes | 74,277 | (13,110 | ) | 66,387 | (21,631 | ) | |||||||||||
Cash provided by operating activities | $ | 32,076 | $ | 46,693 | $ | 81,369 | $ | 119,243 | |||||||||
Cash flows from investing activities | |||||||||||||||||
Proceeds from sale of investments | 23,516 | 1,159 | 54,411 | 125,799 | |||||||||||||
Proceeds from maturities of investments | 40,328 | — | 146,989 | 131,017 | |||||||||||||
Purchase of investments | (98,891 | ) | (162 | ) | (232,840 | ) | (698 | ) | |||||||||
Acquisitions, net of cash acquired | — | 8,001 | — | (1,642,241 | ) | ||||||||||||
Capital expenditures | (2,651 | ) | (8,613 | ) | (9,403 | ) | (16,148 | ) | |||||||||
Cash provided by (used for) investing activities | $ | (37,698 | ) | $ | 385 | $ | (40,843 | ) | $ | (1,402,271 | ) | ||||||
Cash flows from financing activities | |||||||||||||||||
Repurchase of common stock | (13,693 | ) | (4,780 | ) | (52,915 | ) | (4,780 | ) | |||||||||
Employees' tax withheld and paid for restricted stock and restricted stock units | (397 | ) | (521 | ) | (11,186 | ) | (13,863 | ) | |||||||||
Proceeds from issuances under stock-based compensation plans | 1,496 | 53 | 13,446 | 14,925 | |||||||||||||
Proceeds from debt issuance, net | — | — | — | 1,244,713 | |||||||||||||
Payment of cash dividends | (4,951 | ) | (5,971 | ) | (15,008 | ) | (16,953 | ) | |||||||||
Cash provided by (used for) financing activities | $ | (17,545 | ) | $ | (11,219 | ) | $ | (65,663 | ) | $ | 1,224,042 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 344 | 1,211 | 3,460 | (3,519 | ) | ||||||||||||
Net increase in cash and cash equivalents | (22,823 | ) | 37,070 | (21,677 | ) | (62,505 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 303,116 | 291,086 | 301,970 | 390,661 | |||||||||||||
Cash and cash equivalents at end of period | $ | 280,293 | $ | 328,156 | $ | 280,293 | $ | 328,156 | |||||||||
PLANTRONICS, INC. | ||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||
GAAP Net Revenues | $ | 226,534 | $ | 501,669 | $ | 640,760 | $ | 1,206,047 | ||||||||
Deferred revenue purchase accounting | $ | — | $ | 28,923 | $ | — | $ | 65,508 | ||||||||
Non-GAAP Net Revenues | $ | 226,534 | $ | 530,592 | $ | 640,760 | $ | 1,271,555 | ||||||||
GAAP Gross profit | $ | 114,125 | $ | 215,137 | $ | 325,040 | $ | 477,609 | ||||||||
Purchase accounting amortization | — | 27,575 | — | 83,243 | ||||||||||||
Inventory valuation adjustment | — | — | — | 30,395 | ||||||||||||
Deferred revenue purchase accounting | — | 28,923 | — | 65,508 | ||||||||||||
Acquisition and integration fees | — | 404 | — | 621 | ||||||||||||
Stock-based compensation | 917 | 1,067 | 2,709 | 3,103 | ||||||||||||
Other adjustments1 | — | — | 1,585 | — | ||||||||||||
Non-GAAP Gross profit | $ | 115,042 | $ | 273,106 | $ | 329,334 | $ | 660,479 | ||||||||
Non-GAAP Gross profit % | 50.8 | % | 51.5 | % | 51.4 | % | 51.9 | % | ||||||||
GAAP Research, development, and engineering | $ | 21,257 | $ | 59,661 | $ | 62,402 | $ | 140,409 | ||||||||
Stock-based compensation | (2,049 | ) | (2,887 | ) | (6,158 | ) | (7,877 | ) | ||||||||
Acquisition and integration fees | — | (95 | ) | — | (151 | ) | ||||||||||
Purchase accounting amortization | — | (80 | ) | — | ||||||||||||
Non-GAAP Research, development, and engineering | $ | 19,208 | $ | 56,679 | $ | 56,164 | $ | 132,381 | ||||||||
GAAP Selling, general, and administrative | $ | 56,196 | $ | 168,053 | $ | 170,125 | $ | 406,553 | ||||||||
Acquisition and integration fees | — | (21,775 | ) | — | (53,558 | ) | ||||||||||
Purchase accounting amortization | — | (15,278 | ) | — | (30,557 | ) | ||||||||||
Stock-based compensation | (5,063 | ) | (7,765 | ) | (17,180 | ) | (19,729 | ) | ||||||||
Other adjustments2 | — | — | (549 | ) | — | |||||||||||
Non-GAAP Selling, general, and administrative | $ | 51,133 | $ | 123,235 | $ | 152,396 | $ | 302,709 | ||||||||
GAAP Operating expenses | $ | 77,354 | $ | 239,844 | $ | 234,670 | $ | 567,643 | ||||||||
Acquisition and integration fees | — | (21,870 | ) | — | (53,709 | ) | ||||||||||
Purchase accounting amortization | — | (15,278 | ) | (80 | ) | (30,557 | ) | |||||||||
Stock-based compensation | (7,112 | ) | (10,652 | ) | (23,338 | ) | (27,606 | ) | ||||||||
Restructuring and other related (charges) credits | 84 | (12,130 | ) | (2,438 | ) | (20,711 | ) | |||||||||
Other adjustments | — | — | (549 | ) | — | |||||||||||
Non-GAAP Operating expenses | $ | 70,326 | $ | 179,914 | $ | 208,265 | $ | 435,060 | ||||||||
1 | Includes immaterial adjustments for loss on sale of assets and write off of indirect tax assets. |
2 | Includes immaterial adjustments for executive transition costs. |
PLANTRONICS, INC. | ||||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES | ||||||||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (CONTINUED) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||
GAAP Operating income | $ | 36,771 | $ | (24,707 | ) | $ | 90,370 | $ | (90,034 | ) | ||||||||||
Purchase accounting amortization | — | 42,853 | 80 | 113,800 | ||||||||||||||||
Inventory valuation adjustment | — | — | — | 30,395 | ||||||||||||||||
Deferred revenue purchase accounting | — | 28,923 | — | 65,508 | ||||||||||||||||
Acquisition and integration fees | — | 22,274 | — | 54,330 | ||||||||||||||||
Stock-based compensation | 8,029 | 11,719 | 26,047 | 30,709 | ||||||||||||||||
Restructuring and other related charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | |||||||||||||||
Other adjustments | — | — | 2,134 | — | ||||||||||||||||
Non-GAAP Operating income | $ | 44,716 | $ | 93,192 | $ | 121,069 | $ | 225,419 | ||||||||||||
GAAP Net income | $ | (49,504 | ) | $ | (41,734 | ) | $ | (10,723 | ) | $ | (113,971 | ) | ||||||||
Purchase accounting amortization | — | 42,853 | 80 | 113,800 | ||||||||||||||||
Inventory valuation adjustment | — | — | — | 30,395 | ||||||||||||||||
Deferred revenue purchase accounting | — | 28,923 | — | 65,508 | ||||||||||||||||
Acquisition and integration fees | — | 22,274 | — | 54,330 | ||||||||||||||||
Stock-based compensation | 8,029 | 11,719 | 26,047 | 30,709 | ||||||||||||||||
Restructuring and other related charges (credits) | (84 | ) | 12,130 | 2,438 | 20,711 | |||||||||||||||
Other adjustments | — | — | 2,134 | — | ||||||||||||||||
Income tax effect of above items | 2,067 | (18,036 | ) | (6,444 | ) | (56,934 | ) | |||||||||||||
Income tax effect of unusual tax items | 72,599 | (1 | ) | (4,028 | ) | (2 | ) | 68,938 | (3 | ) | (5,387 | ) | (2 | ) | ||||||
Non-GAAP Net income | $ | 33,107 | $ | 54,101 | $ | 82,470 | $ | 139,160 | ||||||||||||
GAAP Diluted earnings per common share | $ | (1.54 | ) | $ | (1.06 | ) | $ | (0.33 | ) | $ | (3.08 | ) | ||||||||
Purchase accounting amortization | — | 1.08 | — | 3.01 | ||||||||||||||||
Inventory valuation adjustment | — | — | — | 0.80 | ||||||||||||||||
Deferred revenue purchase accounting | — | 0.73 | — | 1.73 | ||||||||||||||||
Stock-based compensation | 0.25 | 0.30 | 0.79 | 0.81 | ||||||||||||||||
Acquisition and integration fees | — | 0.56 | — | 1.44 | ||||||||||||||||
Restructuring and other related charges (credits) | — | 0.31 | 0.07 | 0.55 | ||||||||||||||||
Other adjustments | — | — | 0.07 | — | ||||||||||||||||
Income tax effect | 2.29 | (0.57 | ) | 1.90 | (1.65 | ) | ||||||||||||||
Effect of anti-dilutive securities | 0.02 | 0.01 | — | 0.07 | ||||||||||||||||
Non-GAAP Diluted earnings per common share | $ | 1.02 | $ | 1.36 | $ | 2.50 | $ | 3.68 | ||||||||||||
Shares used in diluted earnings per common share calculation: | ||||||||||||||||||||
GAAP | 32,075 | 39,314 | 32,384 | 37,063 | ||||||||||||||||
non-GAAP | 32,496 | 39,712 | 32,945 | 37,819 |
1 | Excluded amounts represent $74.6 million due to change in tax law, and the release of tax reserves. |
2 | Excluded amounts represent tax benefits resulting from the release of tax reserves and tax return true-ups. |
3 | Excluded amounts represent $74.6 million due to change in tax law, tax benefits resulting from the correction of an immaterial error in the first quarter and the release of tax reserves. |
PLANTRONICS, INC. | ||||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP COMBINED COMPARATIVE MEASURES | ||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | December 31, | ||||||||||||||||
20181 | 20181 | 2018 | 2018 | 2018 | ||||||||||||||||
Plantronics GAAP operating income | $ | 33,131 | $ | 20,649 | $ | (85,976 | ) | $ | (24,707 | ) | (56,903 | ) | ||||||||
Polycom GAAP Operating income2 | 19,095 | 12,246 | N/A | N/A | 31,341 | |||||||||||||||
Combined comparative operating income before adjustments | 52,226 | 32,895 | (85,976 | ) | (24,707 | ) | (25,562 | ) | ||||||||||||
Deferred revenue purchase accounting | — | — | 36,585 | 28,923 | 65,508 | |||||||||||||||
Inventory valuation adjustment | — | — | 30,395 | — | 30,395 | |||||||||||||||
Acquisition and integration fees | 10,660 | 12,901 | 26,253 | 22,274 | 72,088 | |||||||||||||||
Stock-based compensation | 7,912 | 8,150 | 10,840 | 11,719 | 38,621 | |||||||||||||||
Restructuring and other related charges | 179 | 2,847 | 7,261 | 12,130 | 22,417 | |||||||||||||||
Non-recurring legal-related and other matters3 | 603 | 609 | — | — | 1,212 | |||||||||||||||
Depreciation and amortization | 29,259 | 29,233 | 82,398 | 55,117 | 196,007 | |||||||||||||||
EBITDA | $ | 100,839 | $ | 86,635 | $ | 107,756 | $ | 105,456 | $ | 400,686 | ||||||||||
1 | Polycom results shown in these periods are prior to the close of the acquisition on July 2, 2018. These results are shown here to arrive at combined comparative historical results. |
2 | Prepared in accordance with U.S. GAAP and Polycom's significant accounting policies as noted in Footnote 1. Basis of Presentation and Footnote 2. Summary of Significant Accounting Policies of exhibit 99.2 in form 8-K/A filed by Plantronics on August, 31, 2018. |
3 | Includes immaterial adjustments to conform historical Polycom results to Plantronics non-GAAP policy. |
PLANTRONICS, INC. | ||||||||
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP COMBINED COMPARATIVE MEASURES | ||||||||
($ in thousands) | ||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||||||
Three Months Ended | Three Months Ended | |||||||
December 31, | March 31, | |||||||
2017 | 2018 | |||||||
Enterprise Headsets | $ | 167,640 | $ | 164,587 | ||||
Consumer Headsets | 58,894 | 51,556 | ||||||
Voice1 | 105,510 | 110,590 | ||||||
Video1 | 104,190 | 81,730 | ||||||
Services1 | 81,820 | 78,920 | ||||||
Combined comparative net revenues | $ | 518,054 | $ | 487,383 | ||||
Plantronics GAAP Gross profit | $ | 114,125 | $ | 114,075 | ||||
Polycom GAAP gross profit2 | 160,730 | 158,569 | ||||||
Combined comparative gross profit before adjustments | $ | 274,855 | $ | 272,644 | ||||
Stock-based compensation | 917 | 913 | ||||||
Purchase accounting amortization | — | 338 | ||||||
Combined comparative adjusted gross profit | $ | 275,772 | $ | 273,895 | ||||
Combined comparative adjusted gross profit % | 53.2 | % | 56.2 | % | ||||
Plantronics GAAP Operating income | $ | 36,771 | $ | 33,131 | ||||
Polycom GAAP Operating income2 | (26,304 | ) | 19,095 | |||||
Combined comparative operating income before adjustments | $ | 10,467 | $ | 52,226 | ||||
Amortization of Polycom Goodwill and intangibles | 56,021 | 14,774 | ||||||
Stock-based compensation | 8,029 | 7,912 | ||||||
Acquisition and integration fees | 2,783 | 10,660 | ||||||
Restructuring and other related (charges) credits | 2,974 | 179 | ||||||
Non-recurring legal-related and other matters3 | 977 | 603 | ||||||
Combined adjusted operating income | $ | 81,251 | $ | 86,354 | ||||
Combined adjusted operating profit % | 15.7 | % | 17.7 | % |
1 | Categories were introduced with the acquisition of Polycom on July 2, 2018. Historical Polycom revenues are shown here to arrive at combined comparative historical net revenues. |
2 | Prepared in accordance with U.S. GAAP and Polycom's significant accounting policies as noted in Footnote 1. Basis of Presentation and Footnote 2. Summary of Significant Accounting Policies of exhibit 99.2 in form 8-K/A filed by Plantronics on August, 31, 2018. |
3 | Includes immaterial adjustments to conform historical Polycom results to Plantronics non-GAAP policy. |
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