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Plantronics Announces First Quarter Fiscal Year 2017 Financial Results

Q1 Results Exceed Guidance; Strong Consumer & Record Unified Communications Revenue;

Company Announces New 1,000,000 Share Repurchase Program

Tuesday, August 2, 2016 1:06 pm PDT

Dateline:

Santa Cruz
"Our upside to expectations was driven by record results in Unified Communications and our strongest ever non-holiday quarter in Consumer Stereo Bluetooth products.  In addition, our award winning mono Bluetooth product, the Voyager 5200 strengthened our position, resulting in year over year revenue growth and further share gains"

SANTA CRUZ, CA - August 2, 2016 - Plantronics, Inc. (NYSE: PLT) today announced first quarter fiscal year 2017 financial results.  Highlights of the first quarter include the following (comparisons are against the first quarter of fiscal year 2016;

  • Net revenues were $223.1 million, an increase of 8% compared with $206.4 million, and above our guidance  range of $207 million to $217 million
  • GAAP gross margin was 50.7% compared with 52.0%
  • Non-GAAP gross margin was 51.1% compared with 52.4%
  • GAAP operating income was $31.3 million compared with $29.4 million
  • Non-GAAP operating income was $38.7 million compared with $37.5 million
  • GAAP diluted earnings per share (“EPS”) was $0.62 compared with $0.55, and above our guidance range of $0.45 to $0.55
  • Non-GAAP diluted EPS was $0.76 compared with $0.67, and above our guidance range of $0.63 to $0.73

  

A reconciliation between our GAAP and non-GAAP results is provided in the tables at the end of this press release.

“Our upside to expectations was driven by record results in Unified Communications and our strongest ever non-holiday quarter in Consumer Stereo Bluetooth products.  In addition, our award winning mono Bluetooth product, the Voyager 5200 strengthened our position, resulting in year over year revenue growth and further share gains,” stated Ken Kannappan, President & CEO.  “We are targeting an improved Non-GAAP operating margin in fiscal year 2017 compared with the prior year."

"Our operating expenses grew at a lower rate than revenues, resulting in operating profit growth of 3.2% and EPS growth of 13%,  despite a one-time $5 million charge related to the GN litigation," stated Pam Strayer, Senior Vice President and Chief Financial Officer. "We continue to focus on building a scalable organization and developing new revenue opportunities, while managing our expenses for operating margin expansion in fiscal 2017.”

Enterprise net revenues grew by 3% to $155.9 million in the first quarter of fiscal year 2017 compared with $151.8 million in the first quarter of fiscal year 2016.

Consumer net revenues grew by 23% to $67.2 million in the first quarter of fiscal year 2017, up from $54.6 million in the first quarter of fiscal year 2016.

GN Litigation Charge & Expenses
We announced a one-time charge related to GN Netcom of $5.0 million, which was included in Non-GAAP results, in addition to higher than typical litigation costs related to the case of $2.2 million.  Despite the materially unfavorable charge and higher than expected litigation costs included in Non-GAAP results, we exceeded previously provided guidance.

Plantronics Announces Quarterly Dividend of $0.15
We are also announcing that we have declared a quarterly dividend of $0.15 per common share, to be paid on September 9, 2016 to all shareholders of record as of the close of business on August 19, 2016.

New 1,000,000 Share Repurchase Program
We are announcing a new 1,000,000 share repurchase program to commence after repurchasing the approximately 90,000 shares remaining under the existing 1,000,000 share repurchase program.

Business Outlook
The following statements are based on our 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 our expectations.

We have a “book and ship” business model whereby we fulfill the majority of orders received within 48 hours of receipt of those orders.  However, our backlog is occasionally subject to cancellation or rescheduling by our customers on short notice with little or no penalty.  Therefore, there is a lack of meaningful correlation between backlog at the end of a fiscal period and net revenues in a succeeding fiscal period.

Our business is inherently difficult to forecast, particularly with continuing uncertainty in regional economic conditions and currency fluctuations, and there can be no assurance that expectations of incoming orders over the balance of the current quarter will materialize.

Subject to the foregoing, we currently expect the following range of financial results for the second quarter of fiscal year 2017 (all amounts assuming currency rates remain stable):

  • Net revenues of $215 million to $225 million;
  • GAAP operating income of $29 million to $34 million;
  • Non-GAAP operating income of $39 million to $44 million, excluding the impact of $8 million from stock-based compensation; and executive severance charges of $2 million
  • Assuming approximately 33 million diluted average weighted shares outstanding:
    • GAAP diluted EPS of $0.51 to $0.61;
    • Non-GAAP diluted EPS of $0.73 to $0.83; and
    • Cost of stock-based compensation to be approximately $0.16 per diluted share and the cost of executive severance to be approximately $0.06 per diluted share

Please see our updated Investor Relations Presentation available on our corporate website at www.plantronics.com/ir.

Conference Call and Prepared Remarks
Plantronics is providing a copy of prepared remarks in combination with its press release. These remarks are offered to provide shareholders and analysts with additional time and detail for analyzing results in advance of our quarterly conference call.  The remarks will be available in the Investor Relations section of our website in conjunction with the press release.

We have scheduled a conference call to discuss first quarter fiscal year 2017 financial results.  The conference call will take place today, August 2, 2016 at 2:00 PM (Pacific Time).  All interested investors and potential investors in our stock are invited to participate.  To listen to the call, please dial in five to ten minutes prior to the scheduled starting time and refer to the “Plantronics Conference Call.”  The dial-in from North America is (888) 301-8736 and the international dial-in is (706) 634-7260.

A replay of the call with the conference ID #44577748 will be available until September 3, 2016 at (855) 859-2056 or (800) 585-8367 for callers from North America and at (404) 537-3406 for all other callers.  The conference call will also be simultaneously webcast in the Investor Relations section of our corporate website at www.plantronics.com/ir, and the webcast of the conference call will remain available on our website for one month. A reconciliation between our GAAP and non-GAAP results is provided in the tables at the end of this press release.

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 operating income, non-GAAP net income and non-GAAP diluted EPS which exclude certain non-cash expenses and charges that are included in the most directly comparable GAAP measure. These non-cash charges and expenses include stock-based compensation related to stock options, restricted stock and employee stock purchases made under our employee stock purchase plan, purchase accounting amortization, accelerated depreciation, and early lease termination charges, all net of the associated tax impact, tax benefits from the release of tax reserves, transfer pricing, tax deduction and tax credit adjustments, and the impact of tax law changes.  We exclude these expenses from our non-GAAP measures primarily because management does not believe they are part 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 long-term target operating model goals.  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 or as a substitute for, or superior to, gross margin, operating income, operating margin, net income or EPS prepared in accordance with GAAP.

As a company with significant global operations and sales, fluctuations in foreign currency exchange rates may have a material effect on our reported results.  Consequently, we also present supplemental metrics as identified in the reconciliation within this release “on a constant currency basis” which excludes the impact of currency exchange rate fluctuations.  The constant currency presentation, which is a non-GAAP measure, is intended to supplement our reported operating results and, when considered in conjunction with the corresponding GAAP measures, facilitate a better understanding of changes in the metrics from period to period and core operations.  We calculate constant currency percentages by removing any hedge gains or losses from the particular metric in the current period and then converting our current period local currency financial results using the foreign currency exchange rates in effect during the prior year period and comparing these adjusted amounts to the corresponding current period metric.

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) improving Non-GAAP operating margin in fiscal year 2017 as compared to fiscal year 2016; (ii) our intention to focus on scaling the organization and developing new revenue opportunities while managing expenses to expand operation margin in fiscal year 2017; (iii) estimates of GAAP and non-GAAP financial results for the second quarter of fiscal year 2017, including net revenues, operating income and diluted EPS; (iv) our estimates of stock-based compensation and purchase accounting amortization and other related charges, as well as the impact of these non-cash expenses on Non-GAAP operating income and diluted EPS for the second quarter of fiscal year 2017; and (v) our estimate of weighted average shares outstanding for the second quarter of fiscal year 2017, 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:

  • Micro and macro-economic conditions in our domestic and international markets;
  • our ability to realize and achieve positive financial results projected to arise from UC adoption could be adversely affected by a variety of factors including the following: (i) as UC becomes more widely adopted, the risk that competitors will offer solutions that will effectively commoditize our headsets which, in turn, will reduce the sales prices for our headsets; (ii) our plans are dependent upon adoption of our UC solution by major platform providers and strategic partners such as Microsoft Corporation, Cisco Systems, Inc., Avaya, Inc., and Alcatel-Lucent, 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) our sales model and expertise must successfully evolve to support complex integration of hardware and software with UC infrastructure consistent with changing customer purchasing expectations; (vi) as UC 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; (vii) UC solutions generally, or our solutions in particular, may not be adopted with the breadth and speed in the marketplace that we currently anticipate; (viii) sales cycles for more complex UC deployments are longer as compared to our traditional Enterprise products; (ix) UC may evolve rapidly and unpredictably and our inability to timely and cost-effectively adapt to those changes and future 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 products are and will be integrated;
  • 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;
  • 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.

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 16, 2016 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:

About Plantronics
Plantronics is a global leader in audio communications for businesses and consumers.  We have pioneered new trends in audio technology for over 50 years, creating innovative products that allow people to simply communicate.  From Unified Communication solutions to Bluetooth headsets, we deliver uncompromising quality, an ideal experience, and extraordinary service. Plantronics is used by every company in the Fortune 100, as well as 911 dispatch, air traffic control and the New York Stock Exchange.  For more information, please visit www.plantronics.com or call (800) 544-4660.

Plantronics is a registered trademark of Plantronics, Inc.  The Bluetooth name and the Bluetooth trademarks are owned by Bluetooth SIG, Inc. and are used by Plantronics, Inc. under license.  All other trademarks are the property of their respective owners.

PLANTRONICS, INC.

SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

($ in thousands, except per share data)

 

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2015

 

2016

 

Net revenues

 

$

206,358

 

 

$

223,106

 

 

Cost of revenues

 

99,000

 

 

110,033

 

 

Gross profit

 

107,358

 

 

113,073

 

 

Gross profit %

 

52.0

%

 

50.7

%

 

 

 

 

 

 

 

Research, development and engineering

 

23,194

 

 

22,344

 

 

Selling, general and administrative

 

55,678

 

 

55,787

 

 

(Gain) loss, net from litigation settlements

 

(876

)

 

4,739

 

 

Restructuring and other related charges

 

 

 

(1,048

)

 

Total operating expenses

 

77,996

 

 

81,822

 

 

Operating income

 

29,362

 

 

31,251

 

 

Operating income %

 

14.2

%

 

14.0

%

 

 

 

 

 

 

 

Interest expense

 

(2,741

)

 

(7,288

)

 

Other non-operating income and (expense), net

 

(285

)

 

2,352

 

 

Income before income taxes

 

26,336

 

 

26,315

 

 

Income tax expense

 

5,108

 

 

5,928

 

 

Net income

 

$

21,228

 

 

$

20,387

 

 

 

 

 

 

 

 

% of net revenues

 

10.3

%

 

9.1

%

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

Basic

 

$

0.56

 

 

$

0.63

 

 

Diluted

 

$

0.55

 

 

$

0.62

 

 

 

 

 

 

 

 

Shares used in computing earnings per common share:

 

 

 

 

 

Basic

 

38,002

 

 

32,243

 

 

Diluted

 

38,943

 

 

32,818

 

 

 

 

 

 

 

 

Effective tax rate

 

19.4

%

 

22.5

%

 

PLANTRONICS, INC.

SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

($ in thousands)

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

March 31,

 

June 30,

 

 

 

2016

 

2016

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

235,266

 

 

$

227,473

 

 

Short-term investments

 

160,051

 

 

171,899

 

 

Total cash, cash equivalents and short-term investments

 

395,317

 

 

399,372

 

 

Accounts receivable, net

 

128,219

 

 

133,155

 

 

Inventory, net

 

53,162

 

 

53,912

 

 

Other current assets

 

20,297

 

 

26,151

 

 

Total current assets

 

596,995

 

 

612,590

 

 

Long-term investments

 

145,623

 

 

132,270

 

 

Property, plant and equipment, net

 

149,735

 

 

151,863

 

 

Goodwill and purchased intangibles, net

 

15,827

 

 

15,765

 

 

Other assets

 

25,257

 

 

19,450

 

 

Total assets

 

$

933,437

 

 

$

931,938

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Accounts payable

 

$

39,133

 

 

$

46,817

 

 

Accrued liabilities

 

70,034

 

 

60,670

 

 

Total current liabilities

 

109,167

 

 

107,487

 

 

Long-term debt, net of issuance costs

 

489,609

 

 

489,971

 

 

Long-term income taxes payable

 

11,968

 

 

12,464

 

 

Other long-term liabilities

 

10,294

 

 

11,448

 

 

Total liabilities

 

621,038

 

 

621,370

 

 

Stockholders' equity

 

312,399

 

 

310,568

 

 

Total liabilities and stockholders' equity

 

$

933,437

 

 

$

931,938

 

 

 

 

 

 

 

 

 

PLANTRONICS, INC.

SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

($ in thousands, except per share data)

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2015

 

2016

 

Cash flows from operating activities

 

 

 

 

 

Net Income

 

$

21,228

 

 

$

20,387

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

4,986

 

 

5,146

 

 

Amortization of debt issuance cost

 

121

 

 

362

 

 

Stock-based compensation

 

8,050

 

 

8,413

 

 

Excess tax benefit from stock-based compensation

 

(2,391

)

 

(339

)

 

Deferred income taxes

 

4,146

 

 

4,890

 

 

Provision for excess and obsolete inventories

 

402

 

 

772

 

 

Restructuring charges

 

 

 

(1,048

)

 

Cash payments for restructuring charges

 

 

 

(2,788

)

 

Other operating activities

 

4,537

 

 

(1,920

)

 

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable, net

 

8,579

 

 

(4,529

)

 

Inventory, net

 

358

 

 

(1,486

)

 

Current and other assets

 

(2,869

)

 

(672

)

 

Accounts payable

 

4,958

 

 

7,055

 

 

Accrued liabilities

 

(6,212

)

 

(1,370

)

 

Income taxes

 

(2,419

)

 

(2,736

)

 

Cash provided by operating activities

 

43,474

 

 

30,137

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Proceeds from sale of investments

 

16,375

 

 

74,349

 

 

Proceeds from maturities of investments

 

25,425

 

 

34,353

 

 

Purchase of investments

 

(43,834

)

 

(106,711

)

 

Capital expenditures

 

(3,966

)

 

(7,579

)

 

Cash used for investing activities

 

(6,000

)

 

(5,588

)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Repurchase of common stock

 

(284,444

)

 

(18,639

)

 

Employees' tax withheld and paid for restricted stock and restricted stock units

 

(9,903

)

 

(8,792

)

 

Proceeds from issuances under stock-based compensation plans

 

3,077

 

 

733

 

 

Proceeds from revolving line of credit

 

155,749

 

 

 

 

Repayments of revolving line of credit

 

(190,249

)

 

 

 

Proceeds from bonds issuance, net

 

489,670

 

 

 

 

Payment of cash dividends

 

(5,828

)

 

(4,970

)

 

Excess tax benefit from stock-based compensation

 

2,391

 

 

339

 

 

Cash provided by (used for) financing activities

 

160,463

 

 

(31,329

)

 

Effect of exchange rate changes on cash and cash equivalents

 

592

 

 

(1,013

)

 

Net increase (decrease) in cash and cash equivalents

 

198,529

 

 

(7,793

)

 

Cash and cash equivalents at beginning of period

 

276,850

 

 

235,266

 

 

Cash and cash equivalents at end of period

 

$

475,379

 

 

$

227,473

 

 

 

 

 

 

 

 

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

 

 

June 30,

 

 

2015

 

2016

 

GAAP Gross profit

$

107,358

 

 

$

113,073

 

 

Stock-based compensation

779

 

 

842

 

 

Non-GAAP Gross profit

$

108,137

 

 

$

113,915

 

 

Non-GAAP Gross profit %

52.4

%

 

51.1

%

 

 

 

 

 

 

GAAP Research, development and engineering

$

23,194

 

 

$

22,344

 

 

Stock-based compensation

(2,359

)

 

(2,484

)

 

Purchase accounting amortization

(62

)

 

(62

)

 

Non-GAAP Research, development and engineering

$

20,773

 

 

$

19,798

 

 

 

 

 

 

 

GAAP Selling, general and administrative

$

55,678

 

 

$

55,787

 

 

Stock-based compensation

(4,912

)

 

(5,087

)

 

Non-GAAP Selling, general and administrative

$

50,766

 

 

$

50,700

 

 

 

 

 

 

 

GAAP Operating expenses

$

77,996

 

 

$

81,822

 

 

Stock-based compensation

(7,271

)

 

(7,571

)

 

Purchase accounting amortization

(62

)

 

(62

)

 

Restructuring and other related charges

 

 

1,048

 

 

Non-GAAP Operating expenses

$

70,663

 

 

$

75,237

 

 

 

 

 

 

 

                        

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

 

 

June 30,

 

 

2015

 

2016

 

GAAP Operating income

$

29,362

 

 

$

31,251

 

 

Stock-based compensation

8,050

 

 

8,413

 

 

Purchase accounting amortization

62

 

 

62

 

 

Restructuring and other related charges

 

 

(1,048

)

 

Non-GAAP Operating income

$

37,474

 

 

$

38,678

 

 

 

 

 

 

 

GAAP Net income

$

21,228

 

 

$

20,387

 

 

Stock-based compensation

8,050

 

 

8,413

 

 

Purchase accounting amortization

62

 

 

62

 

 

Restructuring and other related charges

 

 

(1,048

)

 

Income tax effect of above items

(2,338

)

 

(2,753

)

 

Income tax effect of unusual tax items

(994

)

(1

)

(86

)

(1

)

Non-GAAP Net income

$

26,008

 

 

$

24,975

 

 

 

 

 

 

 

GAAP Diluted earnings per common share

$

0.55

 

 

$

0.62

 

 

Stock-based compensation

0.21

 

 

0.26

 

 

Restructuring and other related charges

 

 

(0.03

)

 

Income tax effect

(0.09

)

 

(0.09

)

 

Non-GAAP Diluted earnings per common share

$

0.67

 

 

$

0.76

 

 

 

 

 

 

 

Shares used in diluted earnings per common share calculation

38,943

 

 

32,818

 

 

(1)

Excluded amounts represent tax benefits from the release of tax reserves.

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 operating income, non-GAAP net income and non-GAAP diluted EPS which exclude certain non-cash expenses and charges that are included in the most directly comparable GAAP measure. These non-cash charges and expenses include stock-based compensation related to stock options, restricted stock and employee stock purchases made under our employee stock purchase plan, purchase accounting amortization, accelerated depreciation, and early lease termination charges, all net of the associated tax impact, tax benefits from the release of tax reserves, transfer pricing, tax deduction and tax credit adjustments, and the impact of tax law changes.  We exclude these expenses from our non-GAAP measures primarily because Plantronics’ management does not believe they are part 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 long-term target operating model goals.  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 or as a substitute for, or superior to, gross margin, operating income, operating margin, net income or EPS prepared in accordance with GAAP.

Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and other Unaudited GAAP Data

($ in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q116

 

Q216

 

Q316

 

Q416

 

Q117

 

GAAP Gross profit

 

$

107,358

 

 

$

110,970

 

 

$

109,516

 

 

$

106,830

 

 

$

113,073

 

 

Stock-based compensation

 

779

 

 

879

 

 

811

 

 

837

 

 

842

 

 

Non-GAAP Gross profit

 

$

108,137

 

 

$

111,849

 

 

$

110,327

 

 

$

107,667

 

 

$

113,915

 

 

Non-GAAP Gross profit %

 

52.4

%

 

52.0

%

 

48.9

%

 

51.3

%

 

51.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

77,996

 

 

$

76,874

 

 

$

82,868

 

 

$

88,895

 

 

$

81,822

 

 

Stock-based compensation

 

(7,271

)

 

(7,953

)

 

(6,906

)

 

(7,829

)

 

(7,571

)

 

Purchase accounting amortization

 

(62

)

 

(63

)

 

(62

)

 

(63

)

 

(62

)

 

Restructuring and other related charges

 

 

 

 

 

(8,433

)

 

(7,727

)

 

1,048

 

 

Non-GAAP Operating expenses

 

$

70,663

 

 

$

68,858

 

 

$

67,467

 

 

$

73,276

 

 

$

75,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income

 

$

29,362

 

 

$

34,096

 

 

$

26,648

 

 

$

17,935

 

 

$

31,251

 

 

Stock-based compensation

 

8,050

 

 

8,832

 

 

7,717

 

 

8,666

 

 

8,413

 

 

Purchase accounting amortization

 

62

 

 

63

 

 

62

 

 

63

 

 

62

 

 

Restructuring and other related charges

 

 

 

 

 

8,433

 

 

7,727

 

 

(1,048

)

 

Non-GAAP Operating income

 

$

37,474

 

 

$

42,991

 

 

$

42,860

 

 

$

34,391

 

 

$

38,678

 

 

Non-GAAP Operating income %

 

18.2

%

 

20.0

%

 

19.0

%

 

16.4

%

 

17.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income before income taxes

 

$

26,336

 

 

$

24,638

 

 

$

19,829

 

 

$

11,373

 

 

$

26,315

 

 

Stock-based compensation

 

8,050

 

 

8,832

 

 

7,717

 

 

8,666

 

 

8,413

 

 

Purchase accounting amortization

 

62

 

 

63

 

 

62

 

 

63

 

 

62

 

 

Restructuring and other related charges

 

 

 

 

 

8,433

 

 

7,727

 

 

(1,048

)

 

Non-GAAP Income before income taxes

 

$

34,448

 

 

$

33,533

 

 

$

36,041

 

 

$

27,829

 

 

$

33,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income tax expense

 

$

5,108

 

 

$

6,742

 

 

$

3,541

 

 

$

(1,607

)

 

$

5,928

 

 

Income tax effect of above items

 

2,338

 

 

2,656

 

 

3,549

 

 

6,004

 

 

2,753

 

 

Income tax effect of unusual tax items

 

994

 

 

177

 

 

1,419

 

 

2,386

 

 

86

 

 

Non-GAAP Income tax expense

 

$

8,440

 

 

$

9,575

 

 

$

8,509

 

 

$

6,783

 

 

$

8,767

 

 

Non-GAAP Income tax expense as a % of Non-GAAP Income before income taxes

 

24.5

%

 

28.6

%

 

23.6

%

 

24.4

%

 

26.0

%

 

Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and other Unaudited GAAP Data (Continued)

($ in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q116

 

Q216

 

Q316

 

Q416

 

Q117

 

GAAP Net income

 

$

21,228

 

 

$

17,896

 

 

$

16,288

 

 

$

12,980

 

 

$

20,387

 

 

Stock-based compensation

 

8,050

 

 

8,832

 

 

7,717

 

 

8,666

 

 

8,413

 

 

Purchase accounting amortization

 

62

 

 

63

 

 

62

 

 

63

 

 

62

 

 

Restructuring and other related charges

 

 

 

 

 

8,433

 

 

7,727

 

 

(1,048

)

 

Income tax effect of above items

 

(2,338

)

 

(2,656

)

 

(3,549

)

 

(6,004

)

 

(2,753

)

 

Income tax effect of unusual tax items

 

(994

)

 

(177

)

 

(1,419

)

 

(2,386

)

 

(86

)

 

Non-GAAP Net income

 

$

26,008

 

 

$

23,958

 

 

$

27,532

 

 

$

21,046

 

 

$

24,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Diluted earnings per common share

 

$

0.55

 

 

$

0.52

 

 

$

0.49

 

 

$

0.39

 

 

$

0.62

 

 

Stock-based compensation

 

0.21

 

 

0.26

 

 

0.24

 

 

0.26

 

 

0.26

 

 

Restructuring and other related charges

 

 

 

 

 

0.25

 

 

0.23

 

 

(0.03

)

 

Income tax effect

 

(0.09

)

 

(0.08

)

 

(0.15

)

 

(0.24

)

 

(0.09

)

 

Non-GAAP Diluted earnings per common share

 

$

0.67

 

 

$

0.70

 

 

$

0.83

 

 

$

0.64

 

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in diluted earnings per common share calculation

 

38,943

 

 

34,245

 

 

33,259

 

 

33,038

 

 

32,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY OF UNAUDITED GAAP DATA

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

Net revenues from unaffiliated customers:

 

 

 

 

 

 

 

 

 

 

 

Enterprise

 

$

151,757

 

 

$

160,468

 

 

$

158,251

 

 

$

156,190

 

 

$

155,897

 

 

Consumer

 

54,601

 

 

54,549

 

 

67,484

 

 

53,607

 

 

67,209

 

 

Total net revenues

 

$

206,358

 

 

$

215,017

 

 

$

225,735

 

 

$

209,797

 

 

$

223,106

 

 

Net revenues by geographic area from unaffiliated customers:

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

117,578

 

 

$

123,803

 

 

$

122,075

 

 

$

119,166

 

 

$

128,238

 

 

International

 

88,780

 

 

91,214

 

 

103,660

 

 

90,631

 

 

94,868

 

 

Total net revenues

 

$

206,358

 

 

$

215,017

 

 

$

225,735

 

 

$

209,797

 

 

$

223,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet accounts and metrics:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

$

127,160

 

 

$

139,939

 

 

$

136,402

 

 

$

128,219

 

 

$

133,155

 

 

Days sales outstanding (DSO)

 

55

 

 

59

 

 

54

 

 

59

 

 

54

 

 

Inventory, net

 

$

55,918

 

 

$

57,760

 

 

$

55,650

 

 

$

53,162

 

 

$

53,912

 

 

Inventory turns

 

7.1

 

 

7.2

 

 

8.3

 

 

7.7

 

 

8.2

 

 

Contact:

INVESTOR CONTACT:
Greg Klaben
Vice President of Investor Relations
(831) 458-7533

MEDIA CONTACT:
George Gutierrez
Sr. Director, Global Communications & Content Strategy
(831) 458-7537

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