PRESS RELEASE

Plantronics Reports Q3 Fiscal Year 2007 Financial Results

FOR INFORMATION, CONTACT: Jon Alvarado Treasurer and Director, Investor Relations (831) 458-7533 FOR IMMEDIATE RELEASE January 22, 2007

SANTA CRUZ, CA - January 22, 2007 - Plantronics, Inc. (NYSE: PLT) today announced third quarter revenues of $215.4 million, down from $222.5 million in the third quarter of fiscal 2006. Revenues from our Audio Communications Group (ACG) segment grew $15 million or approximately 9%, but were more than offset by a $22 million decline in our Audio Entertainment Group (AEG) segment compared to last year’s record December quarter. GAAP EPS was $0.32 compared to $0.52 in the third quarter of fiscal 2006 and non-GAAP EPS in the quarter just ended was $0.38. The difference between GAAP and non-GAAP earnings per share is the after-tax cost of equity-based compensation which was approximately $2.9 million or $0.06 per share.

Ken Kannappan, CEO and President, noted, “Revenues were slightly above the high end of our guidance range of $205 to $215 million while GAAP and non-GAAP EPS were above the ranges we estimated. Our range for GAAP EPS was $0.19 to $0.25 and non-GAAP EPS was $0.25 to $0.30. ACG performed more strongly than we anticipated while AEG underperformed, leading to consolidated operating results being slightly above our internal targets for the quarter. A lower tax rate due to Congress re-enacting the R&D tax credit and foreign exchange gains in other income were the key reasons EPS was well above the high end of our range despite revenues being just above the high end of our range.”

Significant accomplishments during the quarter include:

· resumed growth in our wireless office headset products, with revenues up 11% sequentially and 28% year over year,

· excellent customer response to our Bluetooth line of headsets for mobile phones, with revenues up approximately 40% sequentially and 60% year over year, and

· lower transformation costs in our ACG segment helping stabilize gross margin sequentially in a quarter where it usually declines. (Transformation costs are the costs required to transform raw material into finished product. We have previously discussed our goal to reduce transformation costs.)

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

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

“After a strong December quarter, we started the New Year with our best CES show ever, with outstanding feedback for our products, our roadmaps, our ability to partner with channels and our categories. We were honored with 6 CES Design Innovation Awards and our Discovery 665 won Best of Show from the Bluetooth SIG. We and our channel partners are excited about the long-term growth opportunities we are pursuing,” Kannappan concluded.

ACG Segment

Third quarter revenues of $176.5 million for the Audio Communications Group (ACG) were up approximately 9% in comparison to $161.5 million in the year ago quarter. Wireless headsets led the revenue growth, partially offset by declines in our other product lines.

Sequentially, third quarter revenues were up 8% or $13.5 million with growth coming from all product lines. The largest growth driver was demand for mobile headsets, particularly our Bluetooth line, with total mobile revenues up nearly $10 million. Our Office and Contact Center (OCC) revenue was up $2.5 million with the increase in wireless office products partially offset by a decline in professional grade corded headsets. Computer and Gaming product revenues were up 8% and Clarity was also up approximately 8%.

“The resumption of growth in wireless office revenues after three quarters of relatively flat sequential performance was encouraging though growth was strongly concentrated in EMEA,” said Kannappan. “We believe the growth in EMEA was primarily attributable to an effective marketing campaign but we also believe the growth may have been somewhat bolstered by distributors increasing their inventory. On the other hand, in the U.S. our retail and contract stationer channels had increased revenues from wireless office products offset by a decline in the U.S. commercial distribution channel. Our U.S. commercial distributors have reported to us total sell-through in excess of their total purchases from us, meaning that they reduced inventories. Thus, in total, we are reasonably comfortable that the sequential growth in wireless, though mixed geographically, represents underlying market growth and the resumption of a long term trend toward wireless in the office,” Kannappan concluded.

Non-GAAP gross margin was down 2.2 points compared to the year ago quarter, and down just .1 point sequentially. This result was better than our internal estimates for the December quarter which has a strong consumer focus, and is usually down sequentially from the September quarter. Headsets for mobile phones, which have lower gross margin than our other product categories, grew to 24.4% of ACG revenue compared to 18.6% in the year ago quarter. Primarily as a result of product mix, standard margin was down approximately 4 points. However, as a result of our focus on reducing transformation costs, manufacturing efficiency was much improved contributing approximately 3 points to gross margin compared to the year ago quarter. Finally, also compared to the year ago quarter, we had a slightly higher provision required for inventory obsolescence (.7 pts).

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

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

Sequentially, lower requirements for inventory provisions and improved factory efficiency mostly offset the impact of less favorable product mix and higher freight costs. We also continued to make progress toward Bluetooth profitability, with gross margin on our Bluetooth headset products improving again.

As indicated in our October 24 guidance, we increased operating expenses in ACG, primarily in sales and marketing to fund current quarter campaigns and with the goal of driving continued growth in wireless office in the future.

As a result, non-GAAP operating income was $26.9 million or 15.2% of revenue compared to 16% in the year ago quarter, and 15% in the second quarter.

AEG Segment

Third quarter revenues of $38.9 million for AEG were down approximately $22 million from a record $61 million in the year-ago December quarter. Compared to the year ago quarter, portable product revenues were down 46% and powered product revenues were down approximately 13%. Increased competition and the cumulative reduction of market share in the MP3 accessories market drove the decrease in the portable category.

Sequentially, AEG revenues were up $7 million, or 22%, compared to $31.9 million in the September quarter. Growth was driven by the portable line, which was up 34% with powered up approximately 11%. December is traditionally the strongest quarter of the entire year for the AEG business which has a heavy consumer, and therefore seasonal pattern to its sales.

Although sales in the December quarter were within the range we had estimated for guidance purposes, they were less than the stretch target AEG was striving to achieve. That, coupled with a reduced outlook relative to earlier estimates for certain products on a go-forward basis, led AEG to cancel purchase orders on its suppliers. As a result of these requested cancellations, AEG faces claims for material the suppliers cannot cancel or resell and thus recorded approximately $3 million of related charges and $0.7 million in provisions for on-hand inventory.

The combination of low revenues and significant charges for claims related to cancelled purchase orders with its suppliers led to non-GAAP gross margin declining sharply sequentially from 18.5% to 10.5%. In the year ago quarter, AEG was operating solidly in its operating target model of 30-35%, with a gross margin of 31.3%.

Despite the continued sub-par financial performance of AEG, their channel relationships remain solid, the Altec Lansing brand remains strong and a much-needed product refresh cycle is underway. The efforts of our integrated sales team approach are bearing fruit with the T515 Bluetooth speaker and headset system for MP3 enabled cell phones placement at Cingular and six Altec Lansing products available at Office Depot since November. A strong focus on product development should result in improved financial results by the December quarter next year with a goal of significant progress toward the target operating model in the following year.

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

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

Balance Sheet and Cash Flow Highlights

Inventory decreased by $5.2 million from the September quarter with ACG inventory declining $1.3 million and AEG inventory declining $3.9 million. ACG inventory would have declined further but for growth in EMEA. Inventory turns improved from 3.4 in the September quarter to 4.0 in the December quarter. We currently expect overall inventory to decline further in the March quarter.

“With sales up 11% sequentially and the traditionally slower December collection quarter, accounts receivable grew $13.1 million compared to September but we maintained a 55 DSO on the strength of strong cash collections from our customers. Cash flow from operations was approximately $12 million. We reduced our line of credit by $4 million, paid $2.4 million in dividends and our total cash, cash equivalents and short-term investments increased to $68.7 million from $60.1 million at the end of the September quarter,” said Barbara Scherer, SVP & CFO.

Business Outlook

The following statements are based on current expectations. Many of these statements are forward-looking, and actual results may differ materially.

We have a “book and ship” business model whereby we ship most orders to our customers within 48 hours of our receipt of those orders, and we thus cannot rely on the level of backlog to provide visibility into potential future revenues. In addition, the incoming order rate tends to be low during the last two weeks of December and during the first half of January in the ACG business and then rise significantly into February and March. This historical pattern has recurred thus far this quarter and we therefore must realize an increased incoming order flow for the balance of the quarter in order to achieve the revenue range we are projecting. There can be no assurance that the incoming orders we expect to receive over the balance of the quarter will materialize.

Subject to the foregoing, we are currently expecting the following financial results for Q4:

· Revenues for the fourth quarter of fiscal 2007 to be in the range of $190 - $200 million with seasonal declines for both AEG and the consumer products within ACG

· Increased operating expenses primarily to prepare for spring product launches

· A foreign exchange loss in other income compared to the unusually large $1 million gain we had in Q3, resulting in a $1.3 million unfavorable swing in other income/expense.

· Consolidated GAAP tax rate to be in the range of 18 - 21%

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

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

o Rate is higher when pre-tax profits are higher

o Rate is heavily dependent on the results of operations of AEG as losses in that group result in a lower consolidated corporate rate (whereas profits in AEG result in a higher consolidated corporate tax rate)

· GAAP earnings per share of approximately $0.16 to $0.21

· Non-GAAP earnings per share for the fourth quarter of fiscal 2007 to be in the range of $0.22 - $0.27

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 fourth quarter fiscal year 2007 results or by other public disclosure. Any statements by persons outside Plantronics speculating on the progress of the fourth quarter of the fiscal year will not be based on internal Company information and should be assessed accordingly by investors. The statements do not reflect the potential impact of any mergers or acquisitions that may be completed after the date of this release.

Conference Call Scheduled to Discuss Financial Results

Plantronics has scheduled a conference call to discuss the contents of this release. The conference call will take place today, Monday, January 22 at 2:00 PM (PST). All interested investors and potential investors in Plantronics stock are invited to participate. To listen 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 #2586527 will be available for 72 hours at (800) 642-1687 for callers from the United States 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

We are reporting GAAP versus non-GAAP for equity-based compensation expense for the third quarter and year to date, and to isolate the earnings per share impact of a non-recurring real estate transaction (completed in Q1 FY07) in Year-to-Date results. We believe this is appropriate to enhance an overall understanding of our comparative financial performance and our prospects for the future.

We also believe that our estimates of expense and the earnings per share impact from equity compensation pursuant to FAS 123(R) are subject to a number of risks and uncertainties which we had not faced prior to the first fiscal quarter of 2007, including our estimates of the forfeiture rate, the impact on diluted shares outstanding pursuant to the Treasury Stock method, and the tax rate which will apply to the pre-tax expense. Therefore, we are also estimating earnings per share for the fourth quarter on a GAAP and non-GAAP basis.

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

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

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. Specific forward-looking statements include our prospects for growth and the resumption of a long term trend toward wireless in the office, estimates of revenues, margins, operating expenses, tax rate and earnings for the fourth quarter of fiscal 2007, our belief that total inventory will decline further in the fourth quarter of fiscal 2007 and our belief that AEG will make financial progress on the strength of a product refresh cycle by next December with a goal of returning to their target operating model the year after that. These forward-looking statements involve a number of risks and uncertainties, and are based on current information and management judgment.

Among the factors that could cause actual results to differ materially from those projected are:

· Our operating results are difficult to predict;

· The market for our products is characterized by rapidly changing technology, short product life cycles, and frequent new product introductions, and we may not be able to develop, manufacture or market new products in response to changing customer requirements and new technologies;

· The actions of existing and/or new competitors, especially with regard to pricing and promotional programs;

· Product mix is difficult to estimate and standard margin varies considerably by product;

· 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;

· The inability to successfully develop, manufacture and market new products and achieve volume shipment schedules to meet demand;

· A softening of the level of market demand for our products;

· Class action lawsuits are being brought against us and other Bluetooth headset manufacturers claiming “noise induced hearing loss”. While we believe these suits are without merit, the costs to defend against them could be high and the results of litigation are not predictable in any event;

· Variations in sales and profits in higher tax, as compared to lower tax, jurisdictions;

· Fluctuations in foreign exchange rates;

· 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, an impairment loss must be recognized which would adversely affect our financial results, and

· Changes in the regulatory environment either as to headsets directly or as to the products, such as mobile phones, with which our products are used.

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

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

· Additional risk factors include: changes in the timing and size of orders from our customers, price erosion, increased requirements from retail customers for marketing and advertising funding, interruption in the supply of sole-sourced critical components, continuity of component supply at costs consistent with our plans, failure of our distribution channels to operate as we expect, failure to develop products that keep pace with technological changes, the inherent risks of our substantial foreign operations, problems which might affect our manufacturing facilities in Mexico or in China, and the loss of the services of key executives and employees.

For more information concerning these and other possible risks, please refer to the Company's Annual Report on Form 10-K filed June 5, 2006, 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 Reconciliation for Plantronics, Inc.

· Unaudited GAAP to Non-GAAP Statements of Operations Reconciliations by Segment

· Summary Unaudited Statements of Operations and Related Data

About Plantronics

In 1969, a Plantronics headset carried the historic first 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, and Volume Logic 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

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, 2005			December 31, 2006			December 31, 2005			December 31, 2006
Net revenues	$	222,512		$	215,435		$	543,646		$	605,438
Cost of revenues		128,486			134,099			302,469			370,741
Gross profit		94,026			81,336			241,177			234,697
Gross profit %		42.3	%		37.8	%		44.4	%		38.8	%
Research, development and engineering		15,980			17,709			45,868			53,113
Selling, general and administrative		43,130			46,809			110,845			136,256
Gain on sale of land		-			-			-			(2,637	)
Total operating expenses		59,110			64,518			156,713			186,732
Operating income		34,916			16,818			84,464			47,965
Operating income %		15.7	%		7.8	%		15.5	%		7.9	%
Interest and other income (expense), net		(596	)		1,493			667			2,745
Income before income taxes		34,320			18,311			85,131			50,710
Income tax expense		9,279			3,121			24,685			10,704
Net income	$	25,041		$	15,190		$	60,446		$	40,006
% of net revenues		11.3	%		7.1	%		11.1	%		6.6	%
Diluted earnings per common share	$	0.52		$	0.32		$	1.24		$	0.83
Shares used in diluted per share calculations		48,165			47,922			48,768			47,940
Tax rate		27.0	%		17.0	%		29.0	%		21.1	%

UNAUDITED CONSOLIDATED BALANCE SHEETS
	March 31, 2006		December 31, 2006
ASSETS
Cash and cash equivalents	$	68,703	$	68,743
Marketable securities		8,029		-
Total cash, cash equivalents, and short-term investments		76,732		68,743
Accounts receivable, net		118,008		131,735
Inventory		105,882		134,263
Deferred income taxes		12,409		12,590
Other current assets		15,318		13,870
Total current assets		328,349		361,201
Property, plant and equipment, net		93,874		97,227
Intangibles, net		109,208		102,984
Goodwill		75,077		74,250
Other assets		5,741		6,190
	$	612,249	$	641,852
LIABILITIES AND STOCKHOLDERS' EQUITY
Line of credit	$	22,043	$	6,011
Accounts payable		48,574		45,975
Accrued liabilities		43,081		59,129
Income taxes payable		13,231		7,224
Total current liabilities		126,929		118,339
Deferred tax liability		48,246		41,137
Long-term liability		1,453		1,263
Total liabilities		176,628		160,739
Stockholders' equity		435,621		481,113
	$	612,249	$	641,852

AUDIO COMMUNICATIONS GROUP
SUMMARY CONDENSED FINANCIAL STATEMENTS
(in thousands, except per share data)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended						Nine Months Ended
	December 31, 2005			December 31, 2006			December 31, 2005			December 31, 2006
Net revenues	$	161,519		$	176,511		$	460,728		$	503,281
Cost of revenues		86,598			99,254			244,217			284,445
Gross profit		74,921			77,257			216,511			218,836
Gross profit %		46.4	%		43.8	%		47.0	%		43.5	%
Research, development and engineering		13,936			15,137			41,873			45,697
Selling, general and administrative		35,193			39,265			98,969			111,340
Gain on sale of land		-			-			-			(2,637	)
Total operating expenses		49,129			54,402			140,842			154,400
Operating income	$	25,792		$	22,855		$	75,669		$	64,436
Operating income %		16.0	%		12.9	%		16.4	%		12.8	%

AUDIO ENTERTAINMENT GROUP
SUMMARY CONDENSED FINANCIAL STATEMENTS
(in thousands, except per share data)
UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended						Nine Months Ended
	December 31, 2005			December 31, 2006			December 31, 2005			December 31, 2006
Net sales	$	60,993		$	38,924		$	82,918		$	102,157
Cost of sales		41,888			34,845			58,252			86,296
Gross profit		19,105			4,079			24,666			15,861
Gross profit %		31.3	%		10.5	%		29.7	%		15.5	%
Research, development and engineering		2,044			2,572			3,995			7,416
Selling, general and administrative		7,937			7,544			11,876			24,916
Total operating expenses		9,981			10,116			15,871			32,332
Operating income	$	9,124		$	(6,037	)	$	8,795		$	(16,471	)
Operating income %		15.0	%		-15.5	%		10.6	%		-16.1	%

PLANTRONICS, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended December 31, 2006									Nine Months Ended December 31, 2006
	GAAP			Excluded (1)			Non-GAAP			GAAP			Excluded (2)			Non-GAAP
Net revenues	$	215,435		$	-		$	215,435		$	605,438		$	-		$	605,438
Cost of revenues		134,099			(730	)		133,369			370,741			(2,210	)		368,531
Gross profit		81,336			730			82,066			234,697			2,210			236,907
Gross profit %		37.8	%					38.1	%		38.8	%					39.1	%
Research, development and engineering		17,709			(935	)		16,774			53,113			(2,843	)		50,270
Selling, general and administrative		46,809			(2,576	)		44,233			136,256			(7,564	)		128,692
Gain on sale of land											(2,637	)		2,637			-
Total operating expenses		64,518			(3,511	)		61,007			186,732			(7,770	)		178,962
Operating income		16,818			4,241			21,059			47,965			9,980			57,945
Operating income %		7.8	%					9.8	%		7.9	%					9.6	%
Interest and other income (expense), net		1,493			-			1,493			2,745			-			2,745
Income before income taxes		18,311			4,241			22,552			50,710			9,980			60,690
Income tax expense		3,121			1,358			4,479			10,704			3,085			13,789
Net income	$	15,190		$	2,883		$	18,073		$	40,006		$	6,895		$	46,901
% of net revenues		7.1	%					8.4	%		6.6	%					7.7	%
Diluted earnings per common share	$	0.32		$	0.06		$	0.38		$	0.83		$	0.14		$	0.98
Shares used in diluted per share calculations		47,922			47,922			47,922			47,940			47,940			47,940

AUDIO COMMUNICATIONS GROUP
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended December 31, 2006									Nine Months Ended December 31, 2006
	GAAP			Excluded (1)			Non-GAAP			GAAP			Excluded (2)			Non-GAAP
Net revenues	$	176,511		$	-		$	176,511		$	503,281		$	-		$	503,281
Cost of revenues		99,254			(714	)		98,540			284,445			(2,178	)		282,267
Gross profit		77,257			714			77,971			218,836			2,178			221,014
Gross profit %		43.8	%					44.2	%		43.5	%					43.9	%
Research, development and engineering		15,137			(915	)		14,222			45,697			(2,776	)		42,921
Selling, general and administrative		39,265			(2,383	)		36,882			111,340			(7,103	)		104,237
Gain on sale of land											(2,637	)		2,637			-
Total operating expenses		54,402			(3,298	)		51,104			154,400			(7,242	)		147,158
Operating income	$	22,855		$	4,012		$	26,867		$	64,436		$	9,420		$	73,856
Operating income %		12.9	%					15.2	%		12.8	%					14.7	%

AUDIO ENTERTAINMENT GROUP
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended December 31, 2006									Nine Months Ended December 31, 2006
	GAAP			Excluded (1)			Non-GAAP			GAAP			Excluded (1)			Non-GAAP
Net revenues	$	38,924		$	-		$	38,924		$	102,157		$	-		$	102,157
Cost of revenues		34,845			(16	)		34,829			86,296			(32	)		86,264
Gross profit		4,079			16			4,095			15,861			32			15,893
Gross profit %		10.5	%					10.5	%		15.5	%					15.6	%
Research, development and engineering		2,572			(20	)		2,552			7,416			(67	)		7,349
Selling, general and administrative		7,544			(193	)		7,351			24,916			(461	)		24,455
Total operating expenses		10,116			(213	)		9,903			32,332			(528	)		31,804
Operating income	$	(6,037	)	$	229		$	(5,808	)	$	(16,471	)	$	560		$	(15,911	)
Operating income %		-15.5	%					-14.9	%		-16.1	%					-15.6	%

(1) Excludes stock-based compensation.

(2) Excludes stock-based compensation and gain on sale of land.

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 the impact of all stock-based compensation charges under FAS 123R, and the gain on sale of land, which Plantronics considers a non-recurring transaction. 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 substitue 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.

Summary of Unaudited Statements of Operations and Related Data

	Q105			Q205			Q305			Q405			FY05			Q106			Q206 (1)			Q306(1)			Q406(1)			FY06 (1)			Q107 (1),(2)			Q207 (1),(2)			Q307 (1),(2)
Net revenues	$	131,370		$	130,220		$	150,583		$	147,822		$	559,995		$	148,909		$	172,225		$	222,512		$	206,748		$	750,394		$	195,069		$	194,934		$	215,435
Cost of revenues		61,703			60,719			75,150			73,965			271,537			75,760			98,223			128,486			121,671			424,140			118,306			116,856			133,369
Gross profit		69,667			69,501			75,433			73,857			288,458			73,149			74,002			94,026			85,077			326,254			76,763			78,078			82,066
Gross profit %		53.0	%		53.4	%		50.1	%		50.0	%		51.5	%		49.1	%		43.0	%		42.3	%		41.2	%		43.5	%		39.4	%		40.1	%		38.1	%
Research, development and engineering		10,044			10,838			11,989			12,345			45,216			13,766			16,122			15,980			16,930			62,798			17,573			15,924			16,774
Selling, general and administrative		28,920			25,305			31,642			30,754			116,621			29,892			37,823			43,130			42,249			153,094			42,267			42,191			44,233
Operating expenses		38,964			36,143			43,631			43,099			161,837			43,658			53,945			59,110			59,179			215,892			59,840			58,115			61,007
Operating income		30,703			33,358			31,802			30,758			126,621			29,491			20,057			34,916			25,898			110,362			16,923			19,963			21,059
Operating income %		23.4	%		25.6	%		21.1	%		20.8	%		22.6	%		19.8	%		11.6	%		15.7	%		12.5	%		14.7	%		8.7	%		10.2	%		9.8	%
Income before income taxes		31,038			34,271			33,947			31,104			130,360			29,723			21,088			34,320			27,423			112,554			17,908			20,230			22,552
Income tax expense		8,691			9,596			9,505			5,048			32,840			8,025			7,381			9,279			6,719			31,404			4,261			5,049			4,479
Income tax expense as a percent of income before taxes		28.0	%		28.0	%		28.0	%		16.2	%		25.2	%		27.0	%		35.0	%		27.0	%		24.5	%		27.9	%		23.8	%		25.0	%		19.9	%
Net income		22,347			24,675			24,442			26,056			97,520			21,698			13,707			25,041			20,704			81,150			13,647			15,181			18,073
Diluted shares outstanding		50,428			50,638			51,365			50,967			50,821			49,335			49,007			48,165			48,637			48,788			48,268			47,626			47,922
EPS	$	0.44		$	0.49		$	0.48		$	0.51		$	1.92		$	0.44		$	0.28		$	0.52		$	0.43		$	1.66		$	0.28		$	0.32		$	0.38
Net revenues from unaffiliated customers:
Audio Communication Group
Office and Contact center		82,815			86,204			92,470			104,846			366,335			105,425			107,475			114,290			119,334			446,524			114,267			115,813			118,280
Mobile		34,458			28,815			35,469			26,520			125,262			26,868			26,682			29,973			35,810			119,333			35,806			33,199			43,080
Gaming and Computer		6,992			8,515			15,259			9,038			39,804			9,344			8,906			9,419			7,987			35,656			7,289			7,727			8,364
Other specialty products		7,105			6,686			7,385			7,418			28,594			7,272			7,237			7,837			5,866			28,212			6,375			6,294			6,787
Audio Entertainment Group		-			-			-			-			-			-			21,925			60,993			37,751			120,669			31,332			31,900			38,924
Net revenues by geographical area from unaffiliated customers:
Domestic		89,088			89,375			100,587			96,480			375,530			96,685			113,431			139,033			136,253			485,402			126,900			122,782			126,178
International		42,282			40,845			49,996			51,342			184,465			52,224			58,794			83,479			70,495			264,992			68,169			72,152			89,257
Balance Sheet accounts and metrics:
Accounts receivable, net		68,039			73,345			89,178			87,558			87,558			88,576			115,078			126,169			118,008			118,008			121,702			118,646			131,735
Days sales outstanding		47			51			53			53						54			60			51			51						56			55			55
Inventory, net		47,418			65,940			75,074			60,201			60,201			56,441			99,167			106,573			105,882			105,882			135,979			139,426			134,263
Inventory turns		5.2			3.7			4.0			4.9						5.4			4.0			4.8			4.6						3.5			3.4			4.0

(1) Includes Altec Lansing since the acquisition on August 18, 2005

(2) Non-GAAP