Poly Announces Third Quarter Fiscal Year 2020 Financial Results
SANTA CRUZ, Calif., Feb. 4, 2020 /PRNewswire/ -- Plantronics, Inc. (NYSE: PLT) ("Poly" or the "Company") today announced third quarter fiscal year 2020 results for the period ending December 31, 2019. Highlights of the third quarter include the following:
($ Millions, except percent and per-share data)(1) Q3 FY20 Q3 FY19 YTD FY20 YTD FY19(2)
GAAP Revenue $384 $502 $1,294 $1,206
GAAP Gross Margin 37.4 42.9 43.5 39.6
% % % %
GAAP Operating Income ($77) ($25) ($111) ($90)
GAAP Diluted EPS ($1.97) ($1.06) ($3.78) ($3.08)
Cash Flow from Operations ($17) $47 $16 $119
Non-GAAP Revenue $392 $531 $1,322 $1,272
Non-GAAP Gross Margin 49.4 51.5 52.7 51.9
% % % %
Non-GAAP Operating Income $31 $93 $198 $225
Non-GAAP Diluted EPS $0.30 $1.36 $2.85 $3.68
Adjusted EBITDA $43 $105 $234 $256
(1) For further information on
supplemental non-GAAP metrics refer
to the Use of Non-GAAP And
Comparative Financial Information
and Unaudited Reconciliations of
GAAP Measures To Non-GAAP Measures
sections below.
2 YTD FY19 results shown here do not
reflect Polycom results for the
three months ended June 30, 2018 due
to the completion of the Polycom
acquisition on July 2, 2018.
"While we are disappointed with our results this quarter, particularly Enterprise headsets, we have now begun shipping the first products built on our next-generation architecture for the cloud-connected world," said Joe Burton, President and Chief Executive Officer. "As we ramp the new product portfolio and address our sales and channel distribution issues, we are committed to return to sustained profitable revenue growth."
Results Compared to November 5, 2019 Guidance
Q3 FY20 Results Q3 FY20 Guidance Range(3)
GAAP
Net
Revenue
$384M
$383M - $423M
Non-
GAAP
Net
Revenue
$392M
$390M - $430M
Adjusted
EBITDA
$43M
$33M - $53M
Non-
GAAP
Diluted
EPS $0.30
$0.01 - $0.31
(3) The non-
GAAP
revenue
guidance
range
shown here
excludes
the $7.1
million
impact of
purchase
accounting
related to
recording
deferred
revenue at
fair value
at the
time of
the
acquisition.
"We reduced both channel and on-hand inventory in fiscal Q3," said Chuck Boynton, Executive Vice President and Chief Financial Officer. "In addition, we are announcing the sale of our Consumer Gaming business, which we expect to improve margins and working capital. Lastly, we continue to optimize the remaining Consumer portfolio to improve focus and profitability."
Highlights for the Third Quarter and Fiscal Year 2020
-- Recently introduced products now shipping for revenue include:
-- Studio X30 and X50 video bars with optional TC8 room controller
-- CCX 400 and 500 desktop phones designed for Microsoft Teams
-- Voyager 4200 and Voyager 5200 Office Series, EncorePro 300, and MDA
500QD
-- Many of Poly's most popular headset families now officially support Zoom
for Zoom Meetings and Zoom Phone. The combined Poly portfolio now offers
the broadest selection of Zoom certified and Zoom-supported end points
available in the market today.
-- Poly announced the appointment of Carl Wiese as EVP and Chief Revenue
Officer in charge of global sales. Wiese brings more than 30 years of
experience in sales, marketing, services, and product management for
enterprise technology leaders.
-- The Company has entered into a definitive agreement to sell its Consumer
Gaming assets and expects the transaction to close by the end of March.
Poly Announces Quarterly Dividend of $0.15
The Poly Board of Directors has declared a quarterly cash dividend of $0.15 per common share, to be paid on March 10, 2020, to all shareholders of record as of the close of market on February 20, 2020.
Business Outlook
The following statements are based on the Company's current expectations, and many of these statements are forward-looking. Actual results are subject to a variety of risks and uncertainties and may differ materially from the Company's expectations. Please refer to the Forward Looking Statements Safe Harbor section of this press release below.
The following represents the expected range of financial results for the fourth quarter 2020 (all amounts assuming currency rates remain stable):
Q4 FY20 Guidance
GAAP Net Revenue
$354M - $394M
Non-GAAP Net Revenue(1)
$360M - $400M
Adjusted EBITDA(2)
$20M - $45M
Non-GAAP Diluted EPS2,3
$(0.36) - $0.19
(1) Q4 non-GAAP revenue guidance
excludes anticipated purchase
accounting adjustments of $6.1
million.
(2) Q4 Adjusted EBITDA and non-GAAP
diluted EPS guidance excludes
estimated intangibles amortization
expense of $46.3 million. With
respect to adjusted EBITDA and
diluted EPS guidance, the Company
has determined that it is unable to
provide quantitative
reconciliations of these forward-
looking non-GAAP measures to the
most directly comparable forward-
looking GAAP measures with a
reasonable degree of confidence in
their accuracy without unreasonable
effort, as items including stock
based compensation, acquisition and
integration costs, litigation gains
and losses, and impacts from
discrete tax adjustments and tax
laws are inherently uncertain and
depend on various factors, many of
which are beyond the Company's
control.
(3) EPS guidance assumes approximately
41 million diluted average weighted
shares and a non-GAAP effective
tax rate of 6% to 8%.
Conference Call and Earnings Presentation
Poly is providing an earnings presentation in combination with this press release. The presentation is offered to provide shareholders and analysts with additional detail for analyzing results. The presentation will be available in the Investor Relations section of our corporate website at investor.poly.com along with this press release. A reconciliation of our GAAP to non-GAAP results is provided at the end of this press release.
We have scheduled a conference call to discuss third quarter fiscal year 2020 financial results. The conference call will take place today, February 4, 2020, at 2:00 PM (Pacific Time). All interested investors and potential investors in Poly 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 "Poly Conference Call." The dial-in from North America is (888) 301-8736 and the international dial-in is (706) 634-7260.
The conference call will also be simultaneously webcast and can be accessed from the Investor Relations section of our website. A replay of the call with the conference ID #8387169 will be available until April 5, 2020 at (855) 859-2056 for callers from North America and at (404) 537-3406 for all other callers.
Use of Non-GAAP Financial Information
To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of operating results, including non-GAAP net revenues, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, adjusted EBITDA, and non-GAAP diluted EPS. These non-GAAP measures are adjusted from the most directly comparable GAAP measures to exclude, or include where applicable, the effect of purchase accounting on deferred revenue and inventory, charges associated with the optimization of our Consumer product line, stock-based compensation, acquisition related expenses, purchase accounting amortization and adjustments, restructuring and other related charges and credits, rebranding costs, other unusual and/or non-cash charges and credits, and the impact of participating securities, all net of any associated tax impact. We also exclude tax benefits from the release of tax reserves, discrete tax adjustments including transfer pricing, tax deduction and tax credit adjustments, and the impact of tax law changes. We adjust these amounts from our non-GAAP measures primarily because management does not believe they are consistent with the development of our target operating model. We believe that the use of non-GAAP financial measures provides meaningful supplemental information regarding our performance and liquidity and helps investors compare actual results with our historical and long-term target operating model goals as well as our performance as a combined company. We believe presenting non-GAAP net revenue provides meaningful supplemental information regarding how management views the performance of the business and underlying performance of our individual product categories. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods; however, non-GAAP financial measures are not meant to be considered in isolation of, or as a substitute for, or superior to, net revenues, gross margin, operating expenses, operating income, operating margin, net income or EPS prepared in accordance with GAAP.
Forward Looking Statements Safe Harbor
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to: (i) our efforts to execute to drive sales and sustainable profitable revenue growth; (ii) our expectations for new products launches, the timing of their releases and their expected impact on future growth and on our existing products; (iii) our expectations to avoid business disruption due to potential global health issues, (iv) our expectations for synergies in the quarter and additional anticipated cost savings; (v) our expectations related to the sale of our gaming product line and further optimization of our Consumer product line; (vi) beliefs regarding the strategic and financial benefits of focusing on our Enterprise business, simplifying business processes and reducing working capital; (vii) our expectations for operating cash flow and debt; (viii) expectations relating to our Q-4 and full Fiscal Year 2020 earnings guidance; (ix) estimates of GAAP and non-GAAP financial results for the fourth quarter and full Fiscal Year 2020, including net revenues, purchase accounting adjustments, adjusted EBITDA, tax rates, intangibles amortization, and diluted weighted average shares outstanding and diluted EPS; (x) expectations related to our customers' purchasing decisions and our ability to match product production to demand; (xi) our expectations of the impact of the acquisition of Polycom as it relates to our strategic vision and additional market and strategic partnership opportunities for our combined hardware and services offerings; (xii) our beliefs regarding the UC&C market, market dynamics and opportunities, and customer and partner behavior as well as our position in the market; (xiii) our belief that the increased adoption of certain technologies and our open architecture approach has and will continue to increase demand for our solutions; (xiv) expectations related to the micro and macro-economic conditions in our domestic and international markets and their impact on our future business; (xv) our forecasts and expectations regarding liquidity, capital resources and results of operations along with our intentions concerning the repayment of our debt obligations and our ability to draw funds on our credit facility as needed; (xvi) our forecast and estimates with respect to tax matters, including expectations with respect to utilizing our deferred tax assets; (xvii) our expectations regarding pending and potential future litigation, in addition to other matters discussed in this press release that are not purely historical data.
We do 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:
-- 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 and our subsequent integration
efforts may adversely impact relationships with customers, suppliers and
strategic partners and their operating results and businesses generally
(including the diversion of management time on transaction-related
issues); (iv) we may be unable to retain and hire key personnel; (v) our
increased leverage as a result of the transaction is substantially
greater than prior to the acquisition which may pose risks, including
reduced flexibility in how we use our cash and 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; (vi) 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; (vii) 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; (viii) the potential impact of the transaction on
our future tax rate and payments based on our global entity
consolidation efforts and our ability to quickly and cost effectively
integrate foreign operations; (ix) the challenges of integrating the
supply chains of the two companies; (x) the challenges of sales
execution across different product lines; (xi) our expectations
regarding our the potential that our due diligence did not uncover
risks and potential liabilities of Polycom;
-- the nature and extent of competition we face, particularly subsequent to
the acquisition of Polycom as it relates to our ability to adapt to new
competitors and changing markets;
-- the impact of product transitions underway which are replacing or
upgrading nearly every major product in our product portfolio;
-- the impact of customer brand preferences on Consumer and Enterprise
market demands;
-- the impact of our adoption of a new corporate branding identity,
including any confusion or harm to our reputation resulting therefrom;
-- the impact of ongoing integration, restructuring and disaggregation
activities on our operations, including on employees, distributors,
VARs, suppliers, and customers from the Polycom acquisition;
-- our ability to realize and achieve positive financial results projected
to arise in the our key markets 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 any proprietary solutions of competitors, and our influence over
such providers and the marketing in general 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 UC&C
deployments are longer and becoming more complex; (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;
-- risks associated with our channel partners' sales reporting, product
inventories and product sell through since we sell a significant amount
of products to channel partners who maintain their own inventory of our
products;
-- 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;
-- risks associated with forecasting sales and procurement demands, which
are inherently difficult, particularly with continuing uncertainty in
regional and global economic conditions as well as currency
fluctuations, and there can be no assurance that expectations of
incoming orders over the balance of the current quarter will
materialize;
-- volatility in prices and availability of components from our suppliers,
including our manufacturers located in APAC, 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;
-- 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;
-- seasonality in one or more of our product categories;
-- the potential impact to our results of operations from tax rulings and
interpretations;
-- risks related to our forecasts and expectations regarding liquidity,
capital resources and results of operations along with our intentions
concerning the repayment of our debt obligations and our ability to draw
funds on our credit facility as needed;
-- potential fluctuations in our cash provided by operating activities;
-- risks associated with our anticipated range of capital expenditures for
the remainder of Fiscal Year 2020;
-- the sufficiency of our cash, cash equivalents, and cash from operations
to sustain future operations and discretionary cash requirements;
-- our expenses and expenditures, including research, development and
engineering as well selling, general and administrative;
-- changes in tax laws that could increase our future tax rate and payments
related to unrecognized tax benefits and/or reduce our deferred tax
assets;
-- risks related to our forecasts and estimates with respect to tax
matters, including expectations with respect to utilizing our deferred
tax assets;
-- if we are unable to generate sufficient amount of income, a substantial
valuation allowance to reduce the deferred tax assets may be required;
-- our ability to pay future stockholder dividends or repurchase stock;
-- our beliefs concerning interest rates and foreign currency exchange
rates, our exposure to changes in each, and the benefits and risks of
our hedging activities;
-- the risks of global health issues impacting supply chain, distribution,
product availability, sales execution and/or other business disruption
to our business; and
-- risks related to adverse results in pending litigation or other
regulatory proceedings.
For more information concerning these and other possible risks, please refer to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 17, 2019 and other filings with the Securities and Exchange Commission, as well as recent press releases. The Securities and Exchange Commission 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
-- Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures
About Poly
Poly is a global communications company that powers meaningful human connection and collaboration. Poly combines legendary audio expertise and powerful video and conferencing capabilities to overcome the distractions, complexity and distance that make communication in and out of the workplace challenging. Poly believes in solutions that make life easier when they work together and with our partner's services. Our headsets, software, desk phones, audio and video conferencing, analytics and services are used worldwide and are a leading choice for every kind of workspace. For more information, please visit: www.poly.com.
Poly and the propeller design are trademarks of Plantronics, Inc. All other trademarks are the property of their respective owners.
INVESTOR CONTACT:
Mike Iburg
Vice President, Investor Relations
(831) 458-7533
MEDIA CONTACT:
Edie Kissko
Senior Director and Head of Corporate Communications
(213) 369-3719
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,
2019 2018 2019 2018
Net revenues:
Net product revenues $
316,633 $
445,441 $
1,094,515 $
1,102,012
Net services revenues 67,838 56,228 199,432 104,035
Total net revenues 384,471 501,669 1,293,947 1,206,047
Cost of revenues:
Cost of product revenues 220,469 259,673 658,408 676,616
Cost of service revenues 20,156 26,859 72,976 51,822
Total cost of revenues 240,625 286,532 731,384 728,438
Gross profit 143,846 215,137 562,563 477,609
Gross profit % 37.4 42.9 43.5 39.6
%
%
%
%
Operating expenses:
Research, development, and
engineering 53,769 59,661 170,708 140,409
Selling, general, and
administrative 144,978 168,053 457,004 406,553
(Gain) loss, net from
litigation settlements (1,162) (30)
Restructuring and other
related charges 21,724 12,130 47,096 20,711
Total operating expenses 220,471 239,844 673,646 567,643
Operating income (76,625) (24,707) (111,083) (90,034)
Operating income % (19.9) (4.9) (8.6) (7.5)
%
%
%
%
Interest expense (22,533) (25,032) (70,262) (56,252)
Other non-operating income,
net 967 125 675 3,731
Income before income taxes (98,191) (49,614) (180,670) (142,555)
Income tax expense (benefit) (19,708) (7,880) (31,406) (28,584)
Net income (loss) $
(78,483) $
(41,734) $
(149,264) $
(113,971)
% of net revenues (20.4) (8.3) (11.5) (9.4)
%
%
%
%
Earnings per common share:
Basic $
(1.97) $
(1.06) $
(3.78) $
(3.08)
Diluted $
(1.97) $
(1.06) $
(3.78) $
(3.08)
Shares used in computing
earnings per common share:
Basic 39,784 39,314 39,535 37,063
Diluted 39,784 39,314 39,535 37,063
Effective tax rate (20.1) (15.9) (17.4) (20.1)
%
%
%
%
---
PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands)
UNAUDITED CONSOLIDATED BALANCE SHEETS
December 31, March 31,
2019 2019
ASSETS
Cash and cash equivalents $
156,821 $
202,509
Short-term investments 15,317 13,332
Total cash, cash equivalents, and
short-term investments 172,138 215,841
Accounts receivable, net 246,318 337,671
Inventory, net 215,038 177,146
Other current assets 54,533 50,488
Total current assets 688,027 781,146
Property, plant, and equipment, net 177,482 204,826
Purchased intangibles, net 688,258 825,675
Goodwill 1,279,897 1,278,380
Deferred tax and other assets 97,203 26,508
Total assets $
2,930,867 $
3,116,535
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $
122,314 $
129,514
Accrued liabilities 363,394 398,715
Total current liabilities 485,708 528,229
Long-term debt, net of issuance
costs 1,620,354 1,640,801
Long-term income taxes payable 98,386 83,121
Other long-term liabilities 138,342 142,697
Total liabilities 2,342,790 2,394,848
Stockholders' equity 588,077 721,687
Total liabilities and stockholders'
equity $
2,930,867 $
3,116,535
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,
2019 2018 2019 2018
Cash flows from operating
activities
Net Income $
(78,483) $
(41,734) $
(149,264) $
(113,971)
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 57,556 55,117 172,630 142,763
Amortization of debt issuance
cost 1,340 1,419 4,062 3,188
Stock-based compensation 13,902 11,719 41,499 30,709
Deferred income taxes (17,369) (21,931) (66,171) (39,987)
Provision for excess and obsolete
inventories 13,394 2,073 19,076 4,881
Restructuring charges 21,724 12,130 47,096 20,711
Cash payments for restructuring
charges (6,936) (3,827) (29,885) (11,222)
Other operating activities (5,693) 60 3,201 9,070
Changes in assets and
liabilities:
Accounts receivable, net 30,856 (12,075) 34,634 (35,938)
Inventory, net 6,264 (5,362) (49,320) 11,018
Current and other assets 14,790 33,149 24,142 30,456
Accounts payable (45,600) (4,108) (10,690) 16,519
Accrued liabilities (15,212) 33,172 (46,906) 72,677
Income taxes (7,744) (13,110) 22,251 (21,631)
Cash provided by operating
activities $
(17,211) $
46,693 $
16,355 $
119,243
Cash flows from investing
activities
Proceeds from sale of investments 7 1,159 177 125,799
Proceeds from maturities of
investments 131,017
Purchase of investments (166) (162) (972) (698)
Acquisitions, net of cash
acquired 8,001 (1,642,241)
Capital expenditures (7,724) (8,613) (16,984) (16,148)
Proceeds from sale of property
and equipment 2,142
Cash provided by (used for)
investing activities $
(7,883) $
385 $
(15,637) $
(1,402,271)
Cash flows from financing
activities
Repurchase of common stock (4,780) (4,780)
Employees' tax withheld and paid
for restricted stock and
restricted stock units (388) (521) (9,669) (13,863)
Proceeds from issuances under
stock-based compensation plans 1 53 6,617 14,925
Repayments of long-term debt (25,000)
Proceeds from debt issuance, net 1,244,713
Payment of cash dividends (5,988) (5,971) (17,910) (16,953)
Cash used for financing
activities $
(6,375) $
(11,219) $
(45,962) $
1,224,042
Effect of exchange rate changes
on cash and cash equivalents 1,848 1,211 (444) (3,519)
Net increase (decrease) in cash
and cash equivalents (29,621) 37,070 (45,688) (62,505)
Cash and cash equivalents at
beginning of period 186,442 291,086 202,509 390,661
Cash and cash equivalents at end
of period $
156,821 $
328,156 $
156,821 $
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,
2019 2018 2019 2018
GAAP Net revenues $
384,471 $
501,669 $
1,293,947 $
1,206,047
Deferred revenue purchase
accounting 7,131 28,923 27,815 65,508
Non-GAAP Net revenues $
391,602 $
530,592 $
1,321,762 $
1,271,555
GAAP Gross profit $
143,846 $
215,137 $
562,563 $
477,609
Purchase accounting
amortization 30,819 27,575 91,535 83,243
Inventory valuation
adjustment - 30,395
Deferred revenue purchase
accounting 7,131 28,923 27,815 65,508
Consumer optimization 10,415 10,415
Acquisition and
integration fees 46 404 1,056 621
Stock-based compensation 1,019 1,067 2,994 3,103
Rebranding costs 54 113
Non-GAAP Gross profit $
193,330 $
273,106 $
696,491 $
660,479
Non-GAAP Gross profit % 49.4 51.5 52.7 51.9
%
%
%
%
GAAP Research,
development, and
engineering $
53,769 $
59,661 $
170,708 $
140,409
Stock-based compensation (4,584) (2,887) (12,516) (7,877)
Acquisition and
integration fees (538) (95) (2,439) (151)
Other adjustments - (542)
Non-GAAP Research,
development, and
engineering $
48,647 $
56,679 $
155,211 $
132,381
GAAP Selling, general,
and administrative $
144,978 $
168,053 $
457,004 $
406,553
Acquisition and
integration fees (7,715) (21,775) (35,896) (53,558)
Purchase accounting
amortization (15,278) (15,278) (45,834) (30,557)
Stock-based compensation (8,299) (7,765) (25,989) (19,729)
Rebranding costs (324) (6,392)
Non-GAAP Selling,
general, and
administrative $
113,362 $
123,235 $
342,893 $
302,709
GAAP Operating expenses $
220,471 $
239,844 $
673,646 $
567,643
Acquisition and
integration fees (8,253) (21,870) (38,335) (53,709)
Purchase accounting
amortization (15,278) (15,278) (45,834) (30,557)
Stock-based compensation (12,883) (10,652) (38,505) (27,606)
Restructuring and other
related charges (21,724) (12,130) (47,096) (20,711)
Rebranding costs (324) (6,392)
Other adjustments - 620
Non-GAAP Operating
expenses $
162,009 $
179,914 $
498,104 $
435,060
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,
2019 2018 2019 2018
GAAP Operating income $
(76,625) $
(24,707) $
(111,083) $
(90,034)
Purchase accounting
amortization 46,097 42,853 137,369 113,800
Inventory valuation
adjustment 30,395
Deferred revenue
purchase accounting 7,131 28,923 27,815 65,508
Consumer optimization 10,415 10,415
Acquisition and
integration fees 8,299 22,274 39,391 54,330
Stock-based
compensation 13,902 11,719 41,499 30,709
Restructuring and
other related charges 21,724 12,130 47,096 20,711
Rebranding costs 378 6,505
Other adjustments (620)
Non-GAAP Operating
income $
31,321 $
93,192 $
198,387 $
225,419
GAAP Net income $
(78,483) $
(41,734) $
(149,264) $
(113,971)
Purchase accounting
amortization 46,097 42,853 137,369 113,800
Inventory valuation
adjustment 30,395
Deferred revenue
purchase accounting 7,131 28,923 27,815 65,508
Consumer optimization 10,415 5 10,415 5
Acquisition and
integration fees 8,299 22,274 39,391 54,330
Stock-based
compensation 13,902 11,719 41,499 30,709
Restructuring and
other related charges 21,724 12,130 47,096 20,711
Rebranding costs 378 6,505
Other adjustments (1) (620) 1, 2
Income tax effect of
above items (17,021) (18,036) (45,015) (56,934)
Income tax effect of
unusual tax items (482) (3) (4,028) 4 (2,001) (3) (5,387) 4
Non-GAAP Net income $
11,960 $
54,101 $
113,190 $
139,160
GAAP Diluted earnings
per common share $
(1.97) $
(1.06) $
(3.78) $
(3.08)
Purchase accounting
amortization 1.16 1.08 3.46 3.01
Inventory valuation
adjustment 0.80
Deferred revenue
purchase accounting 0.18 0.73 0.70 1.73
Consumer optimization 0.26 0.26
Stock-based
compensation 0.35 0.30 1.04 0.81
Acquisition and
integration fees 0.21 0.56 0.99 1.44
Restructuring and
other related charges 0.54 0.31 1.19 0.55
Rebranding costs 0.01 0.16
Other adjustments (0.01)
Income tax effect (0.44) (0.57) (1.19) (1.65)
Effect of anti-
dilutive securities 0.01 0.03 0.07
Non-GAAP Diluted
earnings per common
share $
0.30 $
1.36 $
2.85 $
3.68
Shares used in diluted earnings per common share calculation:
GAAP 39,784 39,314 39,535 37,063
non-GAAP 39,870 39,712 39,731 37,819
---
(1) Includes Executive transition
costs and losses due to
litigation settlements.
(2) Excluded amounts represent
immaterial gains from
litigation.
(3) Excluded amounts represent
changes in tax law and the
release of tax reserves.
4 Excluded amounts represent tax
benefits resulting from the
release of tax reserves and tax
return true-ups.
5 Excluded amounts represent
inventory related reserves
associated with optimizing the
consumer product portfolio.
PLANTRONICS, INC.
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
($ in thousands)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
Three Months Ended Twelve Months
Ended
December 31, March 31, June 30, September 30, December 31, December 31,
2018 2019 2019 2019 2019 2019
GAAP operating income $
(24,707) $
(19,259) $
(28,849) $
(5,610) $
(76,625) $
(130,343)
Deferred revenue purchase
accounting 28,923 19,316 12,159 8,524 7,131 47,130
Consumer optimization 10,415 10,415
Acquisition and integration
fees 22,274 14,323 20,435 10,657 8,299 53,714
Stock-based compensation 11,719 11,225 12,904 14,693 13,902 52,724
Restructuring and other
related charges 12,130 11,983 19,525 5,847 21,724 59,079
Rebranding costs 5,192 5,455 672 378 11,697
Other adjustments 1,005 (1,162) 542 385
Depreciation and amortization 55,117 58,606 57,698 57,376 57,556 231,236
Adjusted EBITDA $
105,456 $
102,391 $
98,165 $
92,701 $
42,780 $
336,037
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SOURCE Plantronics, Inc. ("Poly" - formerly Plantronics and Polycom)
