SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

12 Months Ended

Apr. 03, 2021

Segments, Geographical Areas [Abstract]

Segment Reporting and Geographic Information

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

The Company's Chief Executive Office is identified as its Chief Operating Decision Maker ("CODM"). The CODM has organized the Company, manages resource allocations, and measures performance among its two operating segments: Products and Services. During the fourth quarter of Fiscal Year 2020, the Company made key changes to its executive management. We realigned our segment reporting structure commensurate with this change. The reportable segments are consistent with how the segments report to and are managed by Poly’s Chief Executive Officer (the CODM). As a result, the Company’s reportable segments consist of Products and Services. Prior periods have been reclassified to conform to current presentation.

The Products reportable segment includes the Company's Headsets, Voice and Video product lines. The Services reportable segment includes maintenance support on hardware devices as well as professional, managed and cloud services and solutions.

In managing the two operating segments the CODM uses information about their revenue and gross margin after adjustments to exclude certain non-cash transactions and activities that are not reflective of the Company's ongoing or core operations as further described below. The CODM does not review asset information by segment.

Asset impairment: During the fourth quarter of Fiscal 2020, the Company determined certain of its long-lived assets, primarily related to purchased intangibles recorded in connection with the Acquisition of Polycom, were not recoverable and as a result recorded impairment charges representing the excess carrying amount over the estimated fair value (see Note 8, Goodwill and Purchased Intangible Assets).

Purchase accounting amortization: Represents the amortization of purchased intangible assets recorded in connection with the Acquisition of Polycom.

Inventory valuation adjustment: Represents the amortization of the inventory step-up associated with the impact of inventory fair value purchase accounting adjustments recorded in connection with the Acquisition of Polycom.

Deferred revenue purchase accounting: Represents the impact of fair value purchase accounting adjustments related to deferred revenue recorded in connection with the Acquisition of Polycom. The Company's deferred revenue primarily relates to service revenue associated with non-cancelable maintenance support on hardware devices which are typically billed in advance and recognized ratably over the contract term as those services are delivered. This adjustment represents the amount of additional revenue that would have been recognized during the period absent the write-down to fair value required under purchase accounting guidelines.

Consumer optimization: Represents charges related to inventory reserves and supplier liabilities for excess and obsolete inventory incurred in connection with the Company's strategic actions to optimize its Consumer product portfolio.

Acquisition and integration fees: Represents charges incurred in connection with the Acquisition and integration of Polycom such as system implementations, legal and accounting fees.

Stock compensation expense: Represents the non-cash expense associated with the Company's issuance of common stock and share-based awards to employees and non-employee directors.

The following table presents segments results for revenue and gross margin, as reviewed by the CODM, and their reconciliation to the Company's consolidated GAAP results:

	Fiscal Year Ended
(in thousands)	April 3, 2021		March 28, 2020		March 30, 2019
Segment revenues, as reviewed by CODM
Products	$	1,471,963	$	1,434,635	1,518,687
Services	270,049		296,308		240,672
Total segment revenues, as reviewed by CODM	$	1,742,012	$	1,730,943	$	1,759,359
Segment gross profit, as reviewed by CODM
Products	$	679,484	$	697,212	$	766,068
Services	182,522		201,382		162,884
Total segment gross profit, as reviewed by CODM	$	862,006	$	898,594	$	928,952

	Fiscal Year Ended
(in thousands)	April 3, 2021		March 28, 2020		March 30, 2019
Total segment revenues, as reviewed by CODM	$	1,742,012	$	1,730,943	$	1,759,359
Deferred revenue purchase accounting	(14,405)		(33,953)		(84,824)
GAAP total net revenues	$	1,727,607	$	1,696,990	$	1,674,535
Total segment gross profit, as reviewed by CODM (1)	$	862,006	$	898,594	$	928,952
Asset impairment	—		(174,235)		—
Purchase accounting amortization	(68,111)		(122,553)		(114,361)
Inventory valuation adjustment	—		—		(30,395)
Deferred revenue purchase accounting	(14,405)		(33,953)		(84,824)
Consumer optimization	—		(10,415)		—
Integration and rebranding costs	—		(1,211)		(1,057)
Stock-based compensation	(2,939)		(3,992)		(4,176)
GAAP gross profit	$	776,551	$	552,235	$	694,139

(1) Includes depreciation expense of $14.4 million, $15.2 million, and $11.0 million in Fiscal Years 2021, 2020, and 2019, respectively. 

The following table presents long-lived assets by geographic area on a consolidated basis:

(in thousands)	April 3, 2021		March 28, 2020
United States	$	75,998	$	95,521
Netherlands	16,299		17,670
Mexico	39,575		39,210
United Kingdom	3,928		3,962
China	16,871		20,476
Other countries	28,381		33,245
Total long-lived assets	$	181,052	$	210,084