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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange act of 1934

Date of Report (Date of earliest event reported):
May 7, 2019

PLANTRONICS, INC.

(Exact name of Registrant as Specified in its Charter)
Delaware
1-12696
77-0207692
(State or Other Jurisdiction of Incorporation)
 (Commission file number)
(I.R.S. Employer Identification No.)

345 Encinal Street
Santa Cruz, California 95060
(Address of Principal Executive Offices including Zip Code)

(831) 426-5858
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
COMMON STOCK, $0.01 PAR VALUE
 
PLT
 
NEW YORK STOCK EXCHANGE





Item 2.02 Results of Operations and Financial Condition

On May 7, 2019, Plantronics, Inc. ("the Company"), a Delaware corporation, issued a press release and accompanying Company overview presentation reporting its results of operations and financial condition for the fourth quarter of Fiscal Year 2019, which ended on March 31, 2019, a copy of these documents are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K.

The information contained in this Item 2.02 as well as Exhibit 99.1, attached hereto, is intended to be furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure

On May 7, 2019, the Company announced in its press release titled "Plantronics Announces Fourth Quarter Fiscal Year 2019 Financial Results" that its Board of Directors had declared a cash dividend of $0.15 per share of the Company's common stock, payable on June 10, 2019 to stockholders of record at the close of business on May 20, 2019.

Item 9.01 Financial Statements and Exhibits

The following exhibits are filed as part of this Current Report on Form 8-K:
Exhibit Number
Description

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

 
  
 
 
Date: 
May __, 2019
PLANTRONICS, INC.
 
 
 
 
 
 
By:
/s/ Charles D. Boynton
 
 
Name:
Charles D. Boynton
 
 
Title:
Executive Vice President and Chief Financial Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


397837644_finalpolylogorgb.jpg

Poly Announces Fourth Quarter and Fiscal Year 2019 Financial Results
Plantronics and Polycom Relaunch as Poly; announce innovative new products
Earnings driven by successful integration and synergy capture

SANTA CRUZ, Calif., - May 7, 2019 - Plantronics, Inc. (NYSE: PLT) ("Poly") today announced fourth quarter and full fiscal year 2019 results for the period ending March 31, 2019. Highlights of the fourth quarter and full fiscal year include the following:

($ Millions, except percent and per-share data)1
Q4 FY18
Q4 FY19
 
FY18
FY192
GAAP Revenue

$216


$468

 

$857


$1,675

GAAP Gross Margin
52.8
%
46.2
%
 
51.2
%
41.5
%
GAAP Operating Income

$33


($19
)
 

$124


($109
)
GAAP Diluted EPS

$0.29


($0.55
)
 

($0.03
)

($3.61
)
Cash Flow from Operations

$40


($3
)
 

$121


$116

 
 
 
 
 
 
Non-GAAP Revenue

$216


$488

 

$857


$1,759

Non-GAAP Gross Margin
53.2
%
55.0
%
 
51.9
%
52.8
%
Non-GAAP Operating Income

$47


$90

 

$168


$316

Non-GAAP Diluted EPS

$1.05


$1.44

 

$3.55


$5.12

Adjusted EBITDA3

$53


$102

 

$189


$357


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 Full-year FY19 results reflect three quarters of Polycom results due to the completion of the Polycom acquisition on July 2, 2018.
3 On a combined comparative basis, which includes Polycom results for Q1 FY19, FY19 Adjusted EBITDA was $402 million.

“Fiscal 2019 confirms the business logic behind the merger of our two companies. We met our product delivery schedules, achieved or beat our financial commitments, and have demonstrated a real strength in execution," said Joe Burton, President and Chief Executive Officer. “I am incredibly pleased with our progress in integrating our teams, consolidating our systems, and relaunching as Poly. Our strategy positions us well to deliver on the goals outlined in our long-term model.”

Results Compared to February 5, 2019 Guidance
 
Q4 FY19 Results
Q4 FY19 Guidance Range4
GAAP Net Revenue
$468M
$456M - $486M
Non-GAAP Net Revenue
$488M
$475M - $505M
Non-GAAP Operating Income
$90M
$75M - $90M
Non-GAAP Diluted EPS
$1.44
$1.00 - $1.30
4 Non-GAAP guidance ranges shown here exclude the $19.3 million impact of purchase accounting related to recording deferred revenue at fair value at the time of the acquisition.

“I'm excited to join Poly's leadership team to help realize the tremendous market opportunity ahead of us,” said Chuck Boynton, Executive Vice President and Chief Financial Officer. “Our FY19 results demonstrate the accretive power of this acquisition. We are entering FY20 with a strong balance sheet that will get stronger as we continue to pay down debt.”



1



Highlights for the Fourth Quarter and Fiscal Year 2019

Plantronics and Polycom relaunch as Poly, a global technology 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 and Google Cloud announced a new strategic alliance making Poly VVX x50 phones the first desktop phones certified for Google Voice for G Suite.

Poly announced Trio integration with two Amazon Web Services solutions, Amazon Alexa for Business and Chime, and also announced Voyager 4200 UC headset integration with the Amazon Alexa app.

The Company expanded partnerships with both Zoom and GoToMeeting with integrations across multiple products.

The Company revealed the upcoming Poly CCX Series desk phones offering native Microsoft Teams integration.

Poly Studio won Best of Enterprise Connect for Best Communications and Collaboration Device.

The Company's achieved its second consecutive quarter with trailing twelve month EBITDA of over $400 million.

The Company completed its previously announced debt repayment of $100 million on its outstanding Term Loan B and ended fiscal year 2019 with a net debt to Adjusted EBITDA ratio of 3.6x. In addition, during the fourth fiscal quarter the Company repurchased approximately 233 thousand shares at an average price of $36.02.
  
As of today, the Company has achieved a total of $73 million in annual run-rate synergy capture. Through subsequent actions, the Company expects to capture an additional $12 million by June 30, 2019, for a total of $85 million since the close of the Polycom acquisition.

In an effort to align its strategy and focus on its core enterprise markets, the Company announced that it intends to evaluate strategic alternatives for its Consumer business. The Company has not yet determined timing, structure, or financial impact of any potential transaction.


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 June 10, 2019, to all shareholders of record as of the close of market on May 20, 2019.




2



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.

Poly currently expects the following range of financial results for the first quarter and full fiscal year of 2020 (all amounts assuming currency rates remain stable):
 
Q1 FY20 Guidance
FY20 Annual Guidance
GAAP Net Revenue
$471M - $501M
+21% to +24%
Non-GAAP Net Revenue1,2
$485M - $515M
As-reported: +17.5% to 20%
Comparative: +1.5% to +3.5%
Adjusted EBITDA3
$92M - $108M
$410M - $460M
Non-GAAP Diluted EPS3,4
$1.15 - $1.45
Not provided

1 Q1 and full year FY20 non-GAAP revenue guidance excludes purchase accounting adjustments of $13.6 million and $38.0 million, respectively.

2 Standalone growth is based on as reported FY19 non-GAAP net revenues of $1,759 million. Comparative growth is based on combined comparative FY19 net revenues of $2,038 million.

3 Q1 and full year FY20 Adjusted EBITDA and non-GAAP diluted EPS excludes estimated intangibles amortization expense of $44.8 million and $179.2 million, respectively.

4 EPS Guidance assumes approximately 40 million diluted average weighted shares and tax rate of 18% to 20%.

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

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

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 and historical combined comparative results is provided at the end of this press release.

We have scheduled a conference call to discuss fourth quarter and fiscal year 2019 financial results. The conference call will take place today, May 7, 2019, 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 #55437195 will be available until June 6, 2019 at (855) 859-2056 for callers from North America and at (404) 537-3406 for all other callers.


3




Use of Non-GAAP and Combined Comparative Financial Information

To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP, and where applicable, combined comparative 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, which exclude certain unusual or non-cash expenses and charges that are included in the most directly comparable GAAP measure. These unusual or non-cash expenses and charges include the effect, where applicable, of purchase accounting on deferred revenue and inventory, stock-based compensation, acquisition related expenses, purchase accounting amortization and adjustments, restructuring and other related charges and credits, asset impairments, executive transition charges, rebranding costs, gains or losses from litigations settlements, unusual and/or irregular gains or losses from the sale of investments, 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 exclude these amounts from our non-GAAP and combined comparative measures primarily because management does not believe they are consistent with the development of our target operating model. Combined comparative results refer to the results for periods prior to the acquisition of Polycom, which were prepared by combining the non-GAAP results of as if they had been combined during that period. These prior period results are presented on a non-GAAP as-reported basis, with immaterial adjustments to align the treatment of non-GAAP adjustments for comparative purposes. We believe that the use of non-GAAP and combined comparative 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 and combined comparative financial measures in assessing our performance and when planning, forecasting and analyzing future periods; however, non-GAAP and combined comparative 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.

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 believe or expectations regarding our ability to deliver on goals set out in our long-term model; (ii) our expectations on the market opportunities for our business; (iii) belief that our balance sheet will become stronger in fiscal year 2020; (iv) our beliefs regarding our anticipated integration synergies and the timing when we expect to achieve them; (v) our expectations in connection with our Consumer business; (vi) estimates of GAAP and non-GAAP financial results for the first quarter and full year Fiscal Year 2020, including net revenues, purchase accounting adjustments, adjusted EBITDA, tax rates, intangibles amortization, and diluted weighted average shares outstanding and diluted EPS, 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 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


4



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 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; and (x) the potential that our due diligence did not uncover risks and potential liabilities of Polycom;
Micro and macro-economic conditions in our domestic and international markets;
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 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 integration, restructuring and disaggregation activities on our operations, including on employees, suppliers and customers from the potential or actual announcement of any acquisitions or divestitures;
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;
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 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; 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 9, 2018 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.



5



Financial Summaries

The following related charts are provided:
Summary Unaudited Condensed Consolidated Financial Statements
Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures
Unaudited Reconciliations of GAAP Measures to Trailing Twelve Months EBITDA
Unaudited Reconciliations of GAAP Measures to Non-GAAP Combined Comparative 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







6



PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share data)
 
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
March 31,
 
March 31,
 
 
 
2018
 
2019
 
2018
 
2019
 
Net revenues:
 
 
 
 
 
 
 
 
 
Net product revenues
 
$
216,143

 
$
408,757

 
$
856,903

 
$
1,510,769

 
Net services revenues
 

 
59,730

 

 
163,765

 
Total net revenues
 
216,143

 
468,488

 
856,903

 
1,674,535

 
Cost of revenues:
 
 
 
 
 
 
 
 
 
Cost of product revenues
 
102,068

 
226,008

 
417,788

 
902,624

 
Cost of service revenues
 

 
25,949

 

 
77,771

 
Total cost of revenues
 
102,068

 
251,957

 
417,788

 
980,395

 
Gross profit
 
114,075

 
216,531

 
439,115

 
694,140

 
Gross profit %
 
52.8
%
 
46.2
 %
 
51.2
 %
 
41.5
 %
 
Operating expenses:
 
 
 


 
 
 
 
 
Research, development, and engineering
 
21,791

 
61,477

 
84,193

 
201,886

 
Selling, general, and administrative
 
59,265

 
161,325

 
229,390

 
567,878

 
(Gain) loss, net from litigation settlements
 
(125
)
 
1,005

 
(420
)
 
975

 
Restructuring and other related charges
 
13

 
11,983

 
2,451

 
32,694

 
Total operating expenses
 
80,944

 
235,790

 
315,614

 
803,433

 
Operating income
 
33,131

 
(19,259
)
 
123,501

 
(109,293
)
 
Operating income %
 
15.3
%
 
(4.1
)%
 
14.4
 %
 
(6.5
)%
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(7,393
)
 
(26,748
)
 
(29,297
)
 
(83,000
)
 
Other non-operating income, net
 
793

 
2,870

 
6,023

 
6,601

 
Income before income taxes
 
26,531

 
(43,137
)
 
100,227

 
(185,692
)
 
Income tax expense (benefit)
 
16,677

 
(21,548
)
 
101,096

 
(50,131
)
 
Net income (loss)
 
$
9,854

 
$
(21,589
)
 
$
(869
)
 
$
(135,561
)
 
 
 
 
 
 
 
 
 
 
 
% of net revenues
 
4.6
%
 
(4.6
)%
 
(0.1
)%
 
(8.1
)%
 
 
 
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
 
$
0.30

 
$
(0.55
)
 
$
(0.03
)
 
$
(3.61
)
 
Diluted
 
$
0.29

 
$
(0.55
)
 
$
(0.03
)
 
$
(3.61
)
 
 
 
 
 
 
 
 
 
 
 
Shares used in computing earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
 
32,231

 
39,089

 
32,345

 
37,569

 
Diluted
 
32,924

 
39,089

 
32,345

 
37,569

 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
62.9
%
 
50.0
 %
 
100.9
 %
 
27.0
 %
 


7



PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands)
 
UNAUDITED CONSOLIDATED BALANCE SHEETS
 
 
March 31,
 
March 31,
 
 
 
2018
 
2019
 
ASSETS
 
 
 
 
 
Cash and cash equivalents
 
$
390,661

 
$
202,509

 
Short-term investments
 
269,313

 
13,331

 
Total cash, cash equivalents, and short-term investments
 
659,974

 
215,840

 
Accounts receivable, net
 
152,888

 
337,671

 
Inventory, net
 
68,276

 
177,146

 
Other current assets
 
18,588

 
50,489

 
Total current assets
 
899,726

 
781,146

 
Property, plant, and equipment, net
 
142,129

 
204,826

 
Purchased intangibles, net
 

 
825,675

 
Goodwill
 
15,498

 
1,278,380

 
Deferred tax and other assets
 
19,534

 
26,508

 
Total assets
 
$
1,076,887

 
$
3,116,535

 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 

 
 

 
Accounts payable
 
$
45,417

 
$
129,514

 
Accrued liabilities
 
80,097

 
398,715

 
Total current liabilities
 
125,514

 
528,229

 
Long-term debt, net of issuance costs
 
492,509

 
1,640,802

 
Long-term income taxes payable
 
87,328

 
83,121

 
Other long-term liabilities
 
18,566

 
142,696

 
Total liabilities
 
723,917

 
2,394,848

 
Stockholders' equity
 
352,970

 
721,687

 
Total liabilities and stockholders' equity
 
$
1,076,887

 
$
3,116,535

 
 
 
 
 
 
 




8



PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share data)
 
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
March 31,
 
March 31,
 
 
 
2018
 
2019
 
2018
 
2019
 
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
Net Income
 
$
9,854

 
$
(21,589
)
 
$
(869
)
 
$
(135,561
)
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
5,284

 
58,606

 
21,178

 
201,369

 
Amortization of debt issuance cost
 
363

 
1,405

 
1,450

 
4,593

 
Stock-based compensation
 
7,912

 
11,225

 
33,959

 
41,934

 
Deferred income taxes
 
(3,026
)
 
18,181

 
7,464

 
(21,806
)
 
Provision for excess and obsolete inventories
 
1,443

 
2,505

 
3,456

 
7,386

 
Restructuring charges
 
13

 
11,699

 
2,451

 
32,410

 
Cash payments for restructuring charges
 
(31
)
 
(18,035
)
 
(2,942
)
 
(29,257
)
 
Other operating activities
 
340

 
570

 
(305
)
 
9,640

 
Changes in assets and liabilities:
 
 
 
 
 
 
 
 
 
Accounts receivable, net
 
(9,085
)
 
25,631

 
(12,238
)
 
(10,307
)
 
Inventory, net
 
(3,732
)
 
(18,200
)
 
(13,309
)
 
(7,182
)
 
Current and other assets
 
586

 
291

 
(2,480
)
 
30,747

 
Accounts payable
 
101

 
(12,861
)
 
2,884

 
3,658

 
Accrued liabilities
 
11,531

 
(11,006
)
 
(4,164
)
 
61,671

 
Income taxes
 
18,226

 
(51,617
)
 
84,613

 
(73,248
)
 
Cash provided by operating activities
 
$
39,779

 
$
(3,196
)
 
$
121,148

 
$
116,048

 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
Proceeds from sale of investments
 
143,164

 
5,501

 
197,575

 
131,300

 
Proceeds from maturities of investments
 
64,674

 

 
211,663

 
131,017

 
Purchase of investments
 
(140,441
)
 
(124
)
 
(373,281
)
 
(822
)
 
Acquisitions, net of cash acquired
 

 

 

 
(1,642,241
)
 
Capital expenditures
 
(3,065
)
 
(10,649
)
 
(12,468
)
 
(26,797
)
 
Cash provided by (used for) investing activities
 
$
64,332

 
$
(5,272
)
 
$
23,489

 
$
(1,407,543
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
Repurchase of common stock
 
(33
)
 
(8,397
)
 
(52,948
)
 
(13,177
)
 
Employees' tax withheld and paid for restricted stock and restricted stock units
 
(243
)
 
(207
)
 
(11,429
)
 
(14,070
)
 
Proceeds from issuances under stock-based compensation plans
 
10,481

 
805

 
23,927

 
15,730

 
Proceeds from revolving line of credit
 

 

 
8,000

 

 
Repayments of revolving line of credit
 

 

 
(8,000
)
 

 
Repayments of long-term debt
 

 
(103,188
)
 

 
(103,188
)
 
Proceeds from debt issuance, net


 

 

 
1,244,713

 
Payment of cash dividends
 
(4,988
)
 
(5,927
)
 
(19,996
)
 
(22,880
)
 
Cash provided by (used for) financing activities
 
$
5,217

 
$
(116,914
)
 
$
(60,446
)
 
$
1,107,128

 
Effect of exchange rate changes on cash and cash equivalents
 
1,040

 
(265
)
 
4,500

 
(3,784
)
 
Net increase (decrease) in cash and cash equivalents
 
110,368

 
(125,647
)
 
88,691

 
(188,152
)
 
Cash and cash equivalents at beginning of period
 
280,293

 
328,156

 
301,970

 
390,661

 
Cash and cash equivalents at end of period
 
$
390,661

 
$
202,509

 
$
390,661

 
$
202,509

 
 
 
 
 

 
 
 

 


9




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
 
Twelve Months Ended
 

March 31,
 
March 31,
 
 
2018
 
2019
 
2018
 
2019
 
 
 
 
 
 
 
 
 
 
GAAP Net revenues
$
216,143

 
$
468,488

 
$
856,903

 
$
1,674,535

 
Deferred revenue purchase accounting

 
19,316

 

 
84,824

 
Non-GAAP Net revenues
$
216,143

 
$
487,804

 
$
856,903

 
$
1,759,359

 
 
 
 
 
 
 
 
 
 
GAAP Gross profit
$
114,075

 
$
216,531

 
$
439,115

 
$
694,140

 
Purchase accounting amortization

 
31,118

 

 
114,361

 
Inventory valuation adjustment

 

 

 
30,395

 
Deferred revenue purchase accounting

 
19,316

 

 
84,824

 
Acquisition and integration fees

 
435

 

 
1,056

 
Stock-based compensation
913

 
1,073

 
3,622

 
4,176

 
Other adjustments

 

 
1,585

 

 
Non-GAAP Gross profit
$
114,988

 
$
268,473

 
$
444,322

 
$
928,952

 
Non-GAAP Gross profit %
53.2
%
 
55.0
%
 
51.9
%
 
52.8
%
 
 
 
 
 
 
 
 
 
 
GAAP Research, development, and engineering
$
21,791

 
$
61,477

 
$
84,193

 
$
201,886

 
Stock-based compensation
(1,913
)
 
(3,822
)
 
(8,071
)
 
(11,699
)
 
Acquisition and integration fees

 
(86
)
 

 
(237
)
 
Purchase accounting amortization

 

 
(80
)
 

 
Non-GAAP Research, development, and engineering
$
19,878

 
$
57,569

 
$
76,042

 
$
189,950

 
 
 
 
 
 
 
 
 
 
GAAP Selling, general, and administrative
$
59,265

 
$
161,325

 
$
229,390

 
$
567,878

 
Acquisition and integration fees
(6,252
)
 
(13,802
)
 
(6,252
)
 
(67,360
)
 
Purchase accounting amortization

 
(15,281
)
 

 
(45,838
)
 
Stock-based compensation
(5,086
)
 
(6,330
)
 
(22,266
)
 
(26,059
)
 
Rebranding costs

 
(5,192
)
 

 
(5,192
)
 
Other adjustments

 

 
(549
)
 

 
Non-GAAP Selling, general, and administrative
$
47,927

 
$
120,720

 
$
200,323

 
$
423,429

 
 
 
 
 
 
 
 
 
 
GAAP Operating expenses
$
80,944

 
$
235,790

 
$
315,614

 
$
803,433

 
Acquisition and integration fees
(6,252
)
 
(13,888
)
 
(6,252
)
 
(67,597
)
 
Purchase accounting amortization

 
(15,281
)
 
(80
)
 
(45,838
)
 
Stock-based compensation
(6,999
)
 
(10,152
)
 
(30,337
)
 
(37,758
)
 
Restructuring and other related charges
(13
)
 
(11,983
)
 
(2,451
)
 
(32,694
)
 
Rebranding costs

 
(5,192
)
 

 
(5,192
)
 
Other adjustments

 
(1,005
)
 
(549
)
 
(1,005
)
 
Non-GAAP Operating expenses
$
67,680

 
$
178,289

 
$
275,945

 
$
613,349

 
 
 
 
 
 
 
 
 
 

     


10



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
 
Twelve Months Ended
 
 
March 31,
 
March 31,
 
 
2018
 
2019
 
2018
 
2019
 
GAAP Operating income
$
33,131

 
$
(19,259
)
 
$
123,501

 
$
(109,293
)
 
Purchase accounting amortization

 
46,399

 
80

 
160,199

 
Inventory valuation adjustment

 

 

 
30,395

 
Deferred revenue purchase accounting

 
19,316

 

 
84,824

 
Acquisition and integration fees
6,252

 
14,323

 
6,252

 
68,653

 
Stock-based compensation
7,912

 
11,225

 
33,959

 
41,934

 
Restructuring and other related charges
13

 
11,983

 
2,451

 
32,694

 
Rebranding costs

 
5,192

 

 
5,192

 
Other adjustments

 
1,005

 
2,134

 
1,005

 
Non-GAAP Operating income
$
47,308

 
$
90,184

 
$
168,377

 
$
315,603

 
 
 
 
 
 
 
 
 
 
GAAP Net income
$
9,854

 
$
(21,589
)
 
$
(869
)
 
$
(135,561
)
 
Purchase accounting amortization

 
46,399

 
80

 
160,199

 
Inventory valuation adjustment

 

 

 
30,395

 
Deferred revenue purchase accounting

 
19,316

 

 
84,824

 
Acquisition and integration fees
6,252

 
14,323

 
6,252

 
68,653

 
Stock-based compensation
7,912

 
11,225

 
33,959

 
41,934

 
Restructuring and other related charges
13

 
11,983

 
2,451

 
32,694

 
Rebranding costs

 
5,192

 

 
5,192

 
Other adjustments

 
(1,578
)
1 

2,134

2 

(1,578
)
1 

Income tax effect of above items
(2,572
)
 
(16,938
)
 
(9,016
)
 
(73,872
)
 
Income tax effect of unusual tax items
13,142

3 

(11,557
)
4 

82,080

5 

(16,944
)
4 

Non-GAAP Net income
$
34,601

 
$
56,776

 
$
117,071

 
$
195,936

 
 
 
 
 
 
 
 
 
 
GAAP Diluted earnings per common share
$
0.29

 
$
(0.55
)
 
$
(0.03
)
 
$
(3.61
)
 
Purchase accounting amortization

 
1.17

 

 
4.19

 
Inventory valuation adjustment

 

 

 
0.79

 
Deferred revenue purchase accounting

 
0.49

 

 
2.22

 
Stock-based compensation
0.24

 
0.28

 
1.03

 
1.10

 
Acquisition and integration fees
0.19

 
0.36

 
0.19

 
1.79

 
Restructuring and other related charges

 
0.30

 
0.07

 
0.85

 
Rebranding costs

 
0.13

 

 
0.14

 
Other adjustments

 
(0.04
)
 
0.07

 
(0.04
)
 
Income tax effect
0.32

 
(0.73
)
 
2.22

 
(2.37
)
 
Effect of participating securities
0.01

 

 

 

 
Effect of anti-dilutive securities

 
0.03

 

 
0.06

 
Non-GAAP Diluted earnings per common share
$
1.05

 
$
1.44

 
$
3.55

 
$
5.12

 
 
 
 
 
 
 
 
 
 
Shares used in diluted earnings per common share calculation:
GAAP
32,924

 
39,089

 
32,345

 
37,569

 
non-GAAP
32,924

 
39,523

 
32,976

 
38,271

 


11



1 
Excluded amounts represent immaterial losses from litigation and gains from non-recurring sales of investments.
2 
Excluded amounts represent immaterial adjustments for loss on sale of assets and write off of indirect tax assets and executive transition costs.
3 
Excluded amounts represent $13.0 million due to change in tax law and the release of tax reserves.
4 
Excluded amounts primarily represent the release of tax reserves as a result of legal entity integration activities.
5 
Excluded amounts represent $89.4 million due to change in tax law, immaterial tax benefits resulting from the correction of an immaterial error in the first quarter of fiscal year 2018, and the release of tax reserves.


12



PLANTRONICS, INC.
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
($ in thousands)
 
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (CONTINUED)1
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
March 31,
 
March 31,
 
 
2018
 
2019
 
2018
 
2019
 
GAAP Operating income
$
33,131

 
$
(19,259
)
 
$
123,501

 
$
(109,293
)
 
Inventory valuation adjustment

 

 

 
30,395

 
Deferred revenue purchase accounting

 
19,316

 

 
84,824

 
Acquisition and integration fees
6,252

 
14,323

 
6,252

 
68,653

 
Stock-based compensation
7,912

 
11,225

 
33,959

 
41,934

 
Restructuring and other related charges
13

 
11,983

 
2,451

 
32,694

 
Rebranding costs

 
5,192

 

 
5,192

 
Other adjustments

 
1,005

 
2,134

 
1,005

 
Depreciation and amortization
5,284

 
58,606

 
21,178

 
201,369

 
Adjusted EBITDA
$
52,592

 
$
102,391

 
$
189,475

 
$
356,773

 
 
 
 
 
 
 
 
 
 

1 

This table reflects as-reported results in both current and historical periods. Twelve months ended March 31, 2019 results reflect three quarters of Polycom results due to the completion the acquisition of Polycom on July 2, 2018. Prior year periods do reflect no Polycom results.




13



PLANTRONICS, INC.
UNAUDITED RECONCILIATIONS OF GAAP OPERATING INCOME TO COMBINED COMPARATIVE TRAILING TWELVE MONTHS ADJUSTED EBITDA
($ in thousands)
 
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
June 30,
 
September 30,
 
December 31,
 
March 31,
 
March 31,
 
 
20181
 
2018
 
2018
 
2019
 
2019
 
Plantronics GAAP operating income
$
20,649

 
$
(85,976
)
 
$
(24,707
)
 
$
(19,259
)
 
$
(109,293
)
 
Polycom GAAP operating income2
(30,589
)
 
N/A
 
N/A
 
N/A
 
(30,589
)
 
Combined comparative operating income before adjustments
(9,940
)
 
(85,976
)
 
(24,707
)
 
(19,259
)
 
(139,882
)
 
Deferred revenue purchase accounting

 
36,585

 
28,923

 
19,316

 
84,824

 
Inventory valuation adjustment

 
30,395

 

 

 
30,395

 
Acquisition and integration fees
12,901

 
26,253

 
22,274

 
14,323

 
75,751

 
Stock-based compensation
8,150

 
10,840

 
11,719

 
11,225

 
41,934

 
Restructuring and other related charges
2,847

 
7,261

 
12,130

 
11,983

 
34,221

 
Rebranding costs

 

 

 
5,192

 
5,192

 
Other adjustments3
43,446

 

 

 
1,005

 
44,451

 
Depreciation and amortization
29,231

 
82,398

 
55,117

 
58,606

 
225,352

 
Adjusted EBITDA
$
86,635

 
$
107,756

 
$
105,456

 
$
102,391

 
$
402,238

 
 
 
 
 
 
 
 
 
 
 
 

1 
Polycom results shown in these periods are prior to the close of the acquisition on July 2, 2018. These results are shown here to arrive at combined comparative historical results.
2 
Prepared in accordance with U.S. GAAP and Polycom's significant accounting policies prior to the closing of the acquisition on July 2, 2018, and further adjusted in accordance with U.S. GAAP for subsequent events occurring after the balance sheet date of June 30, 2018. Refer to footnote 3 for further information.
3 
Includes losses from litigation settlements and immaterial adjustments to conform historical Polycom results to Plantronics non-GAAP policy. In the period ended June 30, 2018, this includes litigation settlements of approximately $37 million related to the settlement of a previously disclosed FCPA matter and approximately $6 million related other legal settlements, both of which were recognized as subsequent events. More information on these and other legal matters is available in Note 7. Commitments and Contingencies within our Form 10-Q filed on February 6, 2019.



14



PLANTRONICS, INC.
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP COMBINED COMPARATIVE NET REVENUES
($ in thousands)
 
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
 
Three Months Ended
 
Twelve Months Ended
 
 
June 30,
 
September 30,
 
December 31,
 
March 31,
 
March 31,
 
 
2018
 
2018
 
2018
 
2019
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
Enterprise Headsets
$
167,642

 
$
169,978

 
$
173,479

 
$
169,783

 
$
680,882

 
Consumer Headsets
53,667

 
58,053

 
69,665

 
48,432

 
229,817

 
Voice1
106,280

 
121,309

 
116,700

 
106,577

 
450,866

 
Video1
92,001

 
85,922

 
85,597

 
83,966

 
347,486

 
Services1
80,829

 
47,807

 
56,228

 
59,730

 
244,594

 
Deferred revenue purchase accounting

 
36,585

 
28,923

 
19,316

 
84,824

 
Non-GAAP net revenue
$
500,419

 
$
519,654

 
$
530,592

 
$
487,804

 
$
2,038,469

 
 
 
 
 
 
 
 
 
 
 
 
1 

Voice, Video, and Services revenue categories were introduced with the acquisition of Polycom on July 2, 2018. Historical Polycom revenues in the three months ended June 30, 2018 period are included in these results to arrive at combined comparative net revenues for the three months ended June 30, 2018 and twelve months ended March 31, 2019.



15
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

q4fy19earningspresentati
POLY COMPANY OVERVIEW May 7, 2019 NYSE:PLT © 2019 Plantronics Inc. All rights reserved. 1


 
FORWARD LOOKING STATEMENTS This presentation 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 our: (i) expectations for opportunities in Enterprise TAM and our ability to take advantage of the opportunities based on our positioning, product portfolio and launch dates; (ii) expectations regarding the Polycom acquisition, including the anticipated synergies, accretion and long-term operating model targets, and our ability to attain them in the timeframes expected; (iii) beliefs regarding what is required to succeed in the UCC market and our strategy to achieve success; (iv) expectations for end user and software analytics and services, the positioning of our product portfolio and the potential for near-term gains; (v) expectations regarding debt repayment actions and timing; (vi) estimates of GAAP and non-GAAP financial results for Q4 and full year FY20, including net revenues, adjusted EBITDA, tax rates, diluted weighted shares outstanding and diluted EPS; and (vii) estimates of purchase price accounting adjustments, including intangibles amortization, in addition to other matters discussed in this presentation that are not purely historical data. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by such statements. We do not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise, except as required by applicable law. The factors that could cause actual results to differ are discussed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on May 9, 2018, in our reports on Form 10-Q and Form 8-K filed with the SEC as well as our other public disclosures, including our press releases. Please also refer to the Safe Harbor included in our press release regarding our results for Q4 FY19 filed with the SEC on Form 8-K on May 7, 2019. The SEC filings and our press releases can be accessed on our website at investor.poly.com. © 2019 Plantronics Inc. All rights reserved. 2


 
USE OF NON-GAAP INFORMATION To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP, and where applicable, combined comparative 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, which exclude certain unusual or non-cash expenses and charges that are included in the most directly comparable GAAP measure. These unusual or non-cash expenses and charges include the effect, where applicable, of purchase accounting on deferred revenue and inventory, stock-based compensation, acquisition related expenses, purchase accounting amortization and adjustments, restructuring and other related charges and credits, asset impairments, executive transition charges, rebranding costs, gains or losses from litigations settlements, unusual and/or irregular gains or losses from the sale of investments, 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 exclude these amounts from our non-GAAP and combined comparative measures primarily because management does not believe they are consistent with the development of our target operating model. Combined comparative results refer to the results for periods prior to the Plantronics and Polycom combination, which were prepared by combining the non-GAAP results of as if they had been combined during that period. These prior period results are presented on a non-GAAP as-reported basis, with immaterial adjustments to align the treatment of non- GAAP adjustments for comparative purposes. We believe that the use of non-GAAP and combined comparative 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 and combined comparative financial measures in assessing our performance and when planning, forecasting and analyzing future periods; however, non-GAAP and combined comparative 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. A reconciliation between GAAP and Non-GAAP measures for all periods presented in this document is included as an appendix to this document. Other historical reconciliations are available at investor.plantronics.com. © 2019 Plantronics Inc. All rights reserved. 3


 
OVERVIEW & STRATEGY NEW PRODUCTS & ANNOUNCEMENTS Q4 FY19 EARNINGS RESULTS GUIDANCE & LONG TERM MODEL SUPPLEMENTAL DATA & GAAP TO NON-GAAP RECONCILIATIONS © 2019 Plantronics Inc. All rights reserved. 4


 
PLANTRONICS + POLYCOM. NOW POLY. Poly is the global communications company that powers authentic human connection and collaboration. One to one, one to many, many to many. © 2019 Plantronics Inc. All rights reserved. 5


 
LOGO STORY Equilateral triangle/ 60-degree heritage element Multiple P’s merging The Propeller embodies the Poly concept The Propeller Custom geometric All-lowercase resembles a Play letterforms mimic styling conveys button and represents the elements of a sense of forward movement and the symbol approachability progression and humanity © 2019 Plantronics Inc. All rights reserved. 6


 
A COMPELLING INVESTMENT OPPORTUNITY $40B UC&C1 Market UC&C Market Leader Strategic Innovator • We operate in a $40B UC&C • Over $2B in annual revenues and • Reinventing the UC&C industry market with strong growth drivers over $400M TTM EBITDA through product integration, software and analytics • Rise in open architectures creates • Platform-agnostic, intelligent need for a unified endpoint solutions • Valuable business insights available through unique software and • Cloud deployments on rise with • Additional synergy capture planned high demand for analytics and to achieve target operating model analytics capabilities insights • We address a $7B Enterprise TAM growing at 7% 1 Frost & Sullivan, March 2018. © 2019 Plantronics Inc. All rights reserved. 7


 
OPEN COLLABORATION: THE INDUSTRY TRANSITION Communications experience is increasingly integrated and delivered by a unified endpoint Offering a full suite of endpoints is mission-critical © 2019 Plantronics Inc. All rights reserved. 8


 
OUR STRATEGY Deliver a comprehensive set of endpoints for the UCC market and differentiate through software Management Analytics Interoperability Video Conference Desktop Headsets Software Services © 2019 Plantronics Inc. All rights reserved. 9


 
HOW DO WE GET THERE? Expand our TAM in our Invest in strategic core businesses growth areas Drive technology Aggressively target the Expand our strategic leadership huddle room market partner ecosystem © 2019 Plantronics Inc. All rights reserved. 10


 
BROADER UC MARKET AND ECOSYSTEM Key Partners Platforms On-Premise Cloud UC Service Providers UC Our platform agnostic and best-in-class unified endpoint strategy differentiates us © 2019 Plantronics Inc. All rights reserved. 11


 
POLY ADDRESSES A $7B ENTERPRISE TAM GROWING AT 7% Software Analytics and Services provide further upside TAM CAGR TAM1 CY18-CY22 Commentary • Product portfolio well-positioned to $7.0B +7% capitalize on market growth • Potential for market share gains based $5.3B $2.7B +4% on near-term product introductions Poly is uniquely positioned as a market leader with broad Video $2.3B $0.6B +10% product offerings in • Capitalize on differentiated market large and growing end position as a high quality, platform markets Voice $0.4B $1.9B +9% agnostic, intelligent endpoint provider SIP $1.3B Phones $1.8B +8% • Maintain market leadership, capitalize Enterprise $1.3B on growth in UC&C Headsets 2018 2022 1 Frost & Sullivan, Synergy, Wainhouse. © 2019 Plantronics Inc. All rights reserved. 12


 
OVERVIEW & STRATEGY NEW PRODUCTS & ANNOUNCEMENTS Q4 FY19 EARNINGS RESULTS GUIDANCE & LONG TERM MODEL SUPPLEMENTAL DATA & GAAP TO NON-GAAP RECONCILIATIONS © 2019 Plantronics Inc. All rights reserved. 13


 
You couldn’t escape Poly at the event as they took home the Best Communications/Collaboration Device Award for their Polycom Studio, which was justified as there seemed to be one in nearly every booth across the show.” “ – Patrick Watson, UC Today © 2019 Plantronics Inc. All rights reserved. 14


 
PARTNER INTEGRATION UPDATES Google Cloud Amazon Web Zoom GoToMeeting Microsoft VVX x50 Series, first Services Expanded New hardware Revealed upcoming IP phones certified for Trio now integrated partnerships with partnership to meet poly CCX Series - Google Voice with Amazon Chime certifications for Poly the needs of huddle extend Teams straight and Alexa for Business Studio and VVX x50 rooms and medium- to your desktop phone and Voyager 4200 Series sized meeting spaces now integrated with Alexa App © 2019 Plantronics Inc. All rights reserved. 15


 
PRODUCT ANNOUNCEMENTS Polycom Studio Blackwire 7225 Voyager 4200 UC EagleEye Cube CCX Series The USB video bar Corded, boomless Just tap-and-ask, and Turn passive The new standard for designed for small stereo headset with Alexa will respond meetings into intelligent spaces and big ideas active noise canceling powerful experiences communications for small group in desktop phones for meetings Microsoft Teams © 2019 Plantronics Inc. All rights reserved. 16


 
SOFTWARE OVERVIEW Poly Manager Pro Poly Device Management Service Monitoring, managing and maintaining a headset Remote provisioning, managing, and troubleshooting environment remotely, all while saving time and phones, all while saving time and resources resources Provide a Better User Experience and Drive Productivity Device Management | Monitoring | Quality | Health and Safety | Insights Data Analytics © 2019 Plantronics Inc. All rights reserved. 17


 
OVERVIEW & STRATEGY NEW PRODUCTS & ANNOUNCEMENTS Q4 FY19 EARNINGS RESULTS GUIDANCE & LONG TERM MODEL SUPPLEMENTAL DATA & GAAP TO NON-GAAP RECONCILIATIONS © 2019 Plantronics Inc. All rights reserved. 18


 
Q4 FY19 KEY FINANCIAL HIGHLIGHTS • Non-GAAP Revenue of $488 million, within guidance and in line with prior year. ˗ Shipped Poly Studio for revenue, which contributed to Video growth ˗ UC Headsets grew 16% • Full Year combined non-GAAP revenue of $2,038 million up 2%. • The Company announced that it intends to evaluate strategic alternatives for its Consumer business. – The Company has not yet determined timing, structure, or financial impact of any potential transaction. • Non-GAAP gross margins of 55.0%, above long-term target model. ˗ MLCCs no longer materially impacting gross margins. • Non-GAAP operating expenses of $178 million down $10 million. • Year 1 operating expense synergies complete. On track for $85M year-1 total annual run rate cost synergy target • Operating margin of 18.5%, up 80 bps. TTM EBITDA of $402 million. • Repaid $100 million on the Term Loan B in fiscal Q4. Repurchase approximately 233 thousand shares for $8 million. © 2019 Plantronics Inc. All rights reserved. 19


 
COMPARATIVE REVENUE BY CATEGORY ($MM) $487 $488 Services* $79 $77 -2% • Q4 revenue in line with prior year on a combined comparative basis • Video growth of 5% driven by initial shipments of Studio and Video* $82 $86 +5% stabilization in med/large conference room video endpoints • Voice decline primarily driven by legacy audio conferencing products but Trio continues to grow, up 16% year-over-year. Voice* $111 $107 -3% • Consumer decline driven primarily by Gaming Consumer $51 $48 Headsets1 -6% • Enterprise headset revenue growth of 3% driven by UC growth of 16% * Voice, Video, and Services categories were introduced with the acquisition of Polycom Enterprise $165 $170 +3% on July 2, 2018. Historical Polycom revenues are shown here to arrive at combined Headsets comparative historical net revenues. Q4 FY18 Q4 FY19 © 2019 Plantronics Inc. All rights reserved. 20


 
NON-GAAP OPERATING DETAILS 1 $274 $268 $188 $178 $86 $90 $159 $121 $39 $115 $47 $67 Q4 FY18 Q4 FY19 Q4 FY18 Q4 FY19 Q4 FY18 Q4 FY19 Gross Profit Operating Expenses Operating Income • Comparative gross profit • Overall comparative decline • Comparative operating income decline of $6M driven primarily of $10M or 5% growth of $4M or 5% driven by by legacy product margin lower operating expenses as a • Lower operating expenses due declines partially offset by result of successful integration primarily to synergy capture and improved service margins. and synergy capture lower variable compensation • MLCC Impact negligible in the quarter Polycom Historical Plantronics Historical 1 The acquisition of Polycom was completed on July 2, 2018. Prior year Polycom results are added to prior year Plantronics results to arrive at combined comparative results. See GAAP to non-GAAP reconciliations for additional details. © 2019 Plantronics Inc. All rights reserved. 21


 
TRAILING TWELVE MONTHS ADJUSTED EBITDA 1 ($MM) TTM EBITDA: $402M $108 $101 $105 $102 $86 $48 $45 $53 $41 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Polycom Historical Plantronics Historical 1 The acquisition of Polycom was completed on July 2, 2018. Prior year Polycom results are added to prior year Plantronics results to arrive at combined comparative results. See GAAP to non-GAAP reconciliations for additional details. © 2019 Plantronics Inc. All rights reserved. 22


 
CASH BRIDGE Q3-Q4 FY19 ($MM) 216 © 2019 Plantronics Inc. All rights reserved. 23


 
Q2 FY19 Q3 FY19 Q4 FY19 DE-LEVERAGING PROGRESS ($MM) Gross Debt $1,775 $1,775 $1,672 Cash & $306 $342 $216 Investments Net Debt $1,469 $1,433 $1,456 $1,469 $1,433 $1,456 $1,300 3.8x $1,100 3.6x 3.6x 3.0x 2.2x >$500 $460 $391 $401 $402 $410 Q2 FY19 Q3 FY19 Q4 FY19 FY20 Est. LTM Net Debt TTM Adj. EBITDA Net Leverage © 2019 Plantronics Inc. All rights reserved. 24


 
OVERVIEW & STRATEGY NEW PRODUCTS & ANNOUNCEMENTS Q4 FY19 EARNINGS RESULTS GUIDANCE & LONG TERM MODEL GAAP TO NON-GAAP RECONCILIATIONS © 2019 Plantronics Inc. All rights reserved. 25


 
Q1 AND FULL FY20 GUIDANCE (AS OF MAY 7, 2019) Q1 FY20 Guidance FY20 Guidance GAAP Net Revenue $471M - $501M +21% to +24% As-reported: +17.5% to 20% Non-GAAP Net Revenue1,2 $485M - $515M Comparative: +1.5% to +3.5% Adjusted EBITDA3 $92M - $108M $410M - $460M Non-GAAP Diluted EPS3,4 $1.15 - $1.45 Not provided 1 Q1 and full year FY20 non-GAAP revenue guidance excludes purchase accounting adjustments of $13.6 million and $38.0 million, respectively. 2 Standalone growth is based on as reported FY19 non-GAAP net revenues of $1,759 million. Comparative growth is based on combined comparative FY19 net revenues of $2,038 million. 3 Q1 and full year FY20 Adjusted EBITDA and non-GAAP diluted EPS excludes estimated intangibles amortization expense of $44.8 million and $179.2 million, respectively. 4 EPS Guidance assumes approximately 40 million diluted average weighted shares and tax rate of 18% to 20%. Poly does not intend to update these targets during the quarter or to report on its progress toward these targets. Poly will not comment on these targets to analysts or investors except by its press release announcing its first quarter fiscal year 2020 results or by other public disclosure. Any statements by persons outside Poly speculating on the progress of the first quarter or full fiscal year 2020 will not be based on internal company information and should be assessed accordingly by investors. 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. Our business is inherently difficult to forecast, particularly with continuing uncertainty in regional economic conditions, currency fluctuations, customer cancellations and rescheduling, and there can be no assurance that expectations of incoming orders over the balance of the current quarter will materialize. © 2019 Plantronics Inc. All rights reserved. 26


 
COST SYNERGIES ON TARGET Operating Expense Synergies Complete, COGS Synergies on Plan Year 1 Run- Steady State rate Target Target1 • Approximately $25M achieved to date COGS $38M $45-60M • Insourcing and supply chain rationalization on track • Year-1 target complete OpEx $47M $50-55M • On-track for steady state target Total $85M $105M • Completing final actions to achieve year-one target 1 Steady state is defined as achieved annualized run rate synergies within 24 months of the close of the Polycom acquisition on July 2, 2018. © 2019 Plantronics Inc. All rights reserved. 27


 
Intangible assets other than goodwill are carried at cost and amortized over their estimated useful lives GAAP PURCHASE ACCOUNTING FORECAST 4 Quarter Rolling Forecast Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 ($MM) Revenue – Deferred Revenue Fair $13.6 $9.5 $8.0 $6.9 Value Adjustment COGS - Intangibles Amortization1 $29.5 $29.5 $29.5 $29.5 SG&A - Intangibles Amortization1 $15.3 $15.3 $15.3 $15.3 1Intangible assets other than goodwill are carried at cost and amortized over their estimated useful lives. The Company reviews identifiable finite-lived intangible assets for impairtment whenever events or changes in circumstances indicate that the carrying value of the assets may not recoverable. © 2019 Plantronics Inc. All rights reserved. 28


 
Long-Term Model Revenue % Growth Rate 5 - 8% LONG-TERM OPERATING Non-GAAP Gross Margin 52 - 54% MODEL Non-GAAP Operating Margin 21 - 24% Adj. EBITDA > $500M/yr Operating Cash Flow > $300M/yr © 2019 Plantronics Inc. All rights reserved. 29


 
OVERVIEW & STRATEGY NEW PRODUCTS & ANNOUNCEMENTS Q4 FY19 EARNINGS RESULTS GUIDANCE & LONG TERM MODEL SUPPLEMENTAL DATA AND GAAP TO NON-GAAP RECONCILIATIONS © 2019 Plantronics Inc. All rights reserved. 30


 
COMBINED COMPARATIVE NON -GAAP INFORMATION Combined Comparative Basis1 FY18 to Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q4 Y/Y FY19 Revenue $474M $512M $518M $487M $500M $520M $531M $488M In Line +2.4% Gross Profit $257M $284M $276M $274M $268M $277M $273M $268M -2.2% -0.5% Gross Margin 54.2% 55.5% 53.2% 56.2% 53.5% 53.2% 51.5% 55.0% -120 bps -150 bps Op. Expense $187M $184M $195M $188M $196M $180M $180M $178M -5.3% -2.7% Op. Income $70M $100M $81M $86M $72M $96M $93M $90M +4.7% +4.7% Op. Margin 14.7% 19.5% 15.7% 17.7% 14.4% 18.5% 17.6% 18.5% +80 bps +40 bps Diluted EPS NMF NMF NMF NMF NMF $1.51 $1.36 $1.44 NMF NMF Adj. EBITDA $86M $115M $96M $101M $86M $108M $105M $102M +1% +1% Op. Cash Flow $40M $99M $90M $64M $75M $40M $47M -$3M -104.7% -45.7% 1 Combined comparative results include Polycom results in historical periods prior to the closing of the acquisition for comparative purposes. See reconciliations to our GAAP results for additional details. © 2019 Plantronics Inc. All rights reserved. 31


 
AS-REPORTED NON-GAAP INFORMATION 1 FY18 to Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q4 Y/Y FY19 Revenue $204M $210M $227M $216M $221M $520M $531M $488M +125.9% +205.4% Gross Profit $106M $109M $115M $115M $111M $277M $273M $268M +133.0% +209.1% Gross Margin 51.9% 51.6% 50.8% 53.2% 50.1% 53.2% 51.5% 55.0% +180 bps +90 bps Op. Expense $69M $69M $70M $68M $75M $180M $180M $178M +161.8% +222.2% Op. Income $37M $39M $45M $47M $36M $96M $93M $90M +91.5% +187.1% Op. Margin 18.1% 18.8% 19.7% 21.9% 16.2% 18.5% 17.6% 18.5% -340 bps -170 bps Diluted EPS $0.70 $0.80 $1.02 $1.05 $0.74 $1.51 $1.36 $1.44 +37.1% +44.2% Adj. EBITDA $42M $45M $50M $53M $41M $108M $105M $102M +92.5% +87.4% Op. Cash Flow $13M $36M $32M $40M $32M $40M $47M -$3M -107.5% -4.1% 1 See reconciliations to our GAAP results for additional details. © 2019 Plantronics Inc. All rights reserved. 32


 
HISTORICAL REVENUE DATA FY18 to Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q4 Y/Y FY19 Voice1 $98M $114M $106M $111M $106M $121M $117M $107M -3% +5% Video1 $91M $108M $104M $82M $92M $89M $88M $86M +5% -8% Services1 $80M $81M $82M $79M $81M $81M $82M $77M -2% -- Enterprise $155M $163M $168M $165M $168M $170M $173M $170M +3% +5% Headsets Revenue by by Category Revenue Consumer $49M $47M $59M $52M $54M $58M $70M $48M -6% +11% Headsets Americas $259M $291M $265M $261M $265M $284M $278M $255M -2% +1% EMEA $126M $126M $155M $139M $138M $138M $153M $142M +2% +5% Geography Revenue by by Revenue APAC $88M $95M $99M $87M $97M $98M $99M $92M +5% +4% 1 Voice, Video, and Services categories were introduced with the acquisition of Polycom on July 2, 2018. Historical Polycom revenues are shown here to arrive at combined comparative historical net revenues. © 2019 Plantronics Inc. All rights reserved. 33


 
ADJUSTED ENTERPRISE AND CONSUMER HEADSET REVENUE COMPARISON FY18 to Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q4 Y/Y FY19 As Reported: $155M $163M $168M $165M $168M $170M $173M $170M +3% +5% Enterprise Headsets As Reported: $49M $47M $59M $52M $54M $58M $70M $48M -6% +11% Consumer Headsets Adjusted Enterprise $173M $180M $187M $180M $186M $187M $190M $185M +3% +4% Headsets1 Adjusted Consumer $32M $30M $40M $36M $36M $41M $53M $33M -8% +18% Headsets1 FY19 average Adjusted Consumer Headsets gross margins of ~25% 1 For informational purposes related to our announcement to explore strategic alternatives for the Consumer business, Consumer Headsets and Enterprise Headsets shown here have been adjusted in all periods presented to reclassify revenues from the Mono Premium Bluetooth subcategory from As Reported Consumer Headsets into As Reported Enterprise Headsets. © 2019 Plantronics Inc. All rights reserved. 34


 
Unaudited Reconciliations of GAAP net revenue to non-GAAP net revenue ($ in thousands) Three Months Ended September 30, December 31, March 31, 2018 2018 2019 Net revenues from unaffiliated customers: Enterprise Headsets $ 169,978 $ 173,479 $ 169,783 Consumer Headsets 58,053 69,665 48,432 Voice 121,309 116,700 106,577 Video 85,922 85,597 83,966 Services 47,807 56,228 59,730 Total GAAP net revenues $ 483,069 $ 501,669 $ 468,488 Deferred revenue purchase accounting 36,585 28,923 19,316 Total non-GAAP net revenues $ 519,654 $ 530,592 $ 487,804 Net revenues by geographic area from unaffiliated customers: Americas $ 266,641 $ 265,119 $ 246,157 EMEA 128,957 146,388 137,955 APAC $ 87,471 90,162 $ 84,376 Total GAAP net revenues 483,069 501,669 468,488 Deferred revenue purchase accounting 36,585 28,923 19,316 Total non-GAAP net revenues $ 519,654 $ 530,592 $ 487,804


 
Unaudited Reconciliations of GAAP measures to non-GAAP Historical Combined Comparative Measures ($ in thousands) Three Months Ended June 30, September 30, December 31, March 31, June 30 2017 2017 2017 2018 2018 Revenue by Product: Enterprise Headsets $ 154,605 $ 162,907 $ 167,640 $ 164,587 $ 167,642 Consumer Headsets 49,321 47,393 58,894 51,556 53,667 Voice1 98,487 113,632 105,512 110,585 106,280 Video1 91,134 107,675 104,194 81,727 92,001 Services1 80,209 80,531 81,820 78,916 80,829 Combined comparative total net revenues $ 473,756 $ 512,138 $ 518,060 $ 487,371 $ 500,419 Revenue by Region: Plantronics Americas net revenues $ 125,227 $ 129,747 $ 125,361 $ 126,026 $ 130,848 Polycom Americas net revenues1 133,716 160,888 139,421 135,036 133,976 Combined comparative Americas net revenues $ 258,943 $ 290,635 $ 264,782 $ 261,062 $ 264,824 Plantronics EMEA net revenues $ 54,816 $ 56,325 $ 73,620 $ 66,002 $ 63,589 Polycom EMEA net revenues1 71,596 69,690 81,065 73,178 74,726 Combined comparative EMEA net revenues $ 126,412 $ 126,015 $ 154,685 $ 139,180 $ 138,315 Plantronics APAC net revenues $ 23,883 $ 24,227 $ 27,553 $ 24,115 $ 26,871 Polycom APAC net revenues1 64,518 71,261 71,040 63,014 70,409 Combined comparative APAC net revenues $ 88,401 $ 95,488 $ 98,593 $ 87,129 $ 97,280 Combined comparative total net revenues $ 473,756 $ 512,138 $ 518,060 $ 487,371 $ 500,419 1 Voice, Video, and Services categories were introduced with the acquisition of Polycom on July 2, 2018. Historical Polycom revenues are prepared in accordance with U.S. GAAP and Polycom's significant accounting policies prior to the closing of the acquisition on July 2, 2018 and are shown here to arrive at combined comparative historical net revenues.


 
Unaudited Reconciliations of GAAP measures to non-GAAP Historical Combined Comparative Measures (continued) ($ in thousands) Plantronics GAAP gross profit $ 103,283 $ 107,632 $ 114,125 $ 114,075 $ 109,843 Polycom GAAP gross profit1 150,918 175,479 160,730 158,569 156,599 Combined comparative gross profit before adjustments $ 254,201 $ 283,111 $ 274,855 $ 272,644 $ 266,442 Stock-based compensation 902 890 917 913 963 Purchase accounting amortization — — — 337 436 Other adjustments2 1,585 — — — — Combined comparative adjusted gross profit $ 256,688 $ 284,001 $ 275,772 $ 273,894 $ 267,841 Combined comparative adjusted gross profit % 54.2% 55.5% 53.2% 56.2% 53.5% Plantronics GAAP operating income $ 23,440 $ 30,159 $ 36,771 $ 33,131 $ 20,649 Polycom GAAP operating income1 25,272 57,914 (26,304) 19,095 (30,589) Combined comparative operating income before adjustments $ 48,712 $ 88,073 $ 10,467 $ 52,226 $ (9,940) Amortization of Polycom goodwill and intangibles amortization 2,077 675 56,021 14,755 14,802 Stock-based compensation 9,256 8,762 8,029 7,912 8,150 Acquisition and integration fees 1,270 491 2,783 10,660 12,901 Restructuring and other related charges 6,050 770 2,974 179 2,847 Non-recurring legal-related and other adjustments2 2,289 1,029 977 623 43,446 Combined adjusted operating income $ 69,654 $ 99,800 $ 81,251 $ 86,355 $ 72,206 Combined adjusted operating profit % 14.7% 19.5% 15.7% 17.7% 14.4% Unaudited Reconciliations of GAAP measures to Combined Comparative Adjusted EBITDA ($ in thousands) Three Months Ended June 30, September 30, December 31, March 31, June 30, 20171 20171 20171 20181 20181 Plantronics GAAP operating income $ 23,440 $ 30,159 $ 36,771 $ 33,131 $ 20,649 Polycom GAAP operating income2 25,272 57,914 (26,304) 19,095 (30,589) Combined comparative operating income before adjustments 48,712 88,073 10,467 52,226 (9,940) Acquisition and integration fees 1,270 491 2,783 10,660 12,901 Stock-based compensation 9,256 8,762 8,029 7,912 8,150 Restructuring and other related charges 6,050 770 2,974 179 2,847 Other adjustments3 2,289 1,029 977 623 43,446 Depreciation and amortization4 18,019 16,070 70,742 29,259 29,231 Adjusted EBITDA 85,596 115,195 95,972 100,859 86,635


 
Unaudited Reconciliations of GAAP measures to non-GAAP Historical Combined Comparative Measures (continued) ($ in thousands) Three Months Ended June 30, September 30, December 31, March 31, June 30 2017 2017 2017 2018 2018 Plantronics Cash Flow from Operations $ 12,885 $ 36,408 $ 32,076 $ 39,779 $ 32,082 Polycom Cash Flow from Operations1 $ 27,196 $ 62,307 $ 57,768 $ 24,442 $ 43,059 Combined Comparative Cash Flow from Operations $ 40,081 $ 98,715 $ 89,844 $ 64,221 $ 75,141 1 Polycom results shown in these periods are prior to the close of the acquisition on July 2, 2018. These results are shown here to arrive at combined comparative historical results. 2 Prepared in accordance with U.S. GAAP and Polycom's significant accounting policies prior to the closing of the acquisition on July 2, 2018, and further adjusted in accordance with U.S. GAAP for subsequent events occurring after the balance sheet date of June 30, 2018. Refer to footnote 3 for further information. Includes losses from litigation settlements and immaterial adjustments to conform historical Polycom results to Plantronics non-GAAP policy. In the period ended June 30, 2018, this 3 includes litigation settlements of approximately $37 million related to the settlement of a previously disclosed FCPA matter and approximately $6 million related other legal settlements, both of which were recognized as subsequent events. More information on these and other legal matters is available in Note 7. Commitments and Contingencies within our Form 10-Q filed on February 6, 2019. 4 In the three months ending December 31, 2017, March 31, 2018, and June 30, 2018, depreciation and amortization includes amortization of Polycom goodwill in accordance with U.S. GAAP and Polycom's significant accounting policies prior to the closing of the acquisition on July 2, 2018.


 
PLANTRONICS, INC. UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES ($ in thousands, except per share data) UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA - AS REPORTED Three Months Ended, June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, 2017 2017 2017 2018 2018 2018 2018 2019 GAAP Net revenues $ 203,926 $ 210,300 $ 226,534 $ 216,143 $ 221,309 $ 483,069 $ 501,669 $ 468,488 Deferred revenue purchase accounting — — — — — 36,585 28,923 19,316 Non-GAAP Net revenues $ 203,926 $ 210,300 $ 226,534 $ 216,143 $ 221,309 $ 519,654 $ 530,592 $ 487,804 GAAP Gross profit $ 103,283 $ 107,632 $ 114,125 $ 114,075 $ 109,843 $ 152,629 $ 215,137 $ 216,531 Purchase accounting amortization — — — — — 55,668 27,575 31,118 Inventory valuation adjustment — — — — — 30,395 — — Deferred revenue purchase accounting — — — — — 36,585 28,923 19,316 Acquisition and integration fees — — — — — 217 404 435 Stock-based compensation 902 890 917 913 963 1,073 1,067 1,073 Other Adjustments 1,585 — — — — — — — Non-GAAP Gross profit $ 105,770 $ 108,522 $ 115,042 $ 114,988 $ 110,806 $ 276,567 $ 273,106 $ 268,473 Non-GAAP Gross profit % 51.9% 51.6% 50.8% 53.2% 50.1% 53.2% 51.5% 55.0% GAAP Operating expenses $ 79,843 $ 77,473 $ 77,354 $ 80,944 $ 89,194 $ 238,605 $ 239,844 $ 235,790 Acquisition and integration fees — — — (6,252) (5,803) (26,036) (21,870) (13,888) Purchase accounting amortization (63) (17) — — — (15,279) (15,278) (15,281) Stock-based compensation (8,354) (7,872) (7,112) (6,999) (7,187) (9,767) (10,652) (10,152) Restructuring and other related charges (2,573) 51 84 (13) (1,320) (7,261) (12,130) (11,983) Rebranding costs — — — — — — — (5,192) Other adjustments — (549) — — — — — (1,005) Non-GAAP Operating expenses $ 68,853 $ 69,086 $ 70,326 $ 67,680 $ 74,884 $ 180,262 $ 179,914 $ 178,289


 
PLANTRONICS, INC. UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES ($ in thousands, except per share data) UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA - AS REPORTED (CONTINUED) Three Months Ended June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, 2017 2017 2017 2018 2018 2018 2018 2019 GAAP Operating income $ 23,440 $ 30,159 $ 36,771 $ 33,131 $ 20,649 $ (85,976) $ (24,707) $ (19,259) Purchase accounting amortization 63 17 — — — 70,947 42,853 46,399 Inventory valuation adjustment — — — — — 30,395 — — Deferred revenue purchase accounting — — — — — 36,585 28,923 19,316 Acquisition and integration fees — — — 6,252 5,803 26,253 22,274 14,323 Stock-based compensation 9,256 8,762 8,029 7,912 8,150 10,840 11,719 11,225 Restructuring and other related charges 2,573 (51) (84) 13 1,320 7,261 12,130 11,983 Rebranding costs — — — — — — — 5,192 Other adjustments 1,585 549 — — — — — 1,005 Non-GAAP Operating income $ 36,917 $ 39,436 $ 44,716 $ 47,308 $ 35,922 $ 96,305 $ 93,192 $ 90,184 GAAP Diluted earnings per common share $ 0.57 $ 0.59 $ (1.54) $ 0.29 $ 0.42 $ (2.21) $ (1.06) $ (0.55) Purchase accounting amortization — — — — — 1.78 1.08 1.17 Inventory valuation adjustment — — — — — 0.76 — — Deferred revenue purchase accounting — — — — — 0.92 0.73 0.49 Stock-based compensation 0.28 0.27 0.25 0.24 0.24 0.27 0.30 0.28 Acquisition and integration fees — — — 0.19 0.17 0.66 0.56 0.36 Restructuring and other related charges 0.08 — — — 0.04 0.18 0.31 0.30 Rebranding costs — — — — — — — 0.13 Other adjustments 0.05 0.02 — — — — — (0.04) Income tax effect (0.28) (0.10) 2.29 0.32 (0.14) (0.89) (0.57) (0.73) Effect of participating securities — 0.02 — 0.01 0.01 — — — Effect of anti-dilutive securities — — 0.02 — — 0.04 0.01 0.03 Non-GAAP Diluted earnings per common share $ 0.70 $ 0.80 $ 1.02 $ 1.05 $ 0.74 $ 1.51 $ 1.36 $ 1.44 Shares used in diluted earnings per common share calculation: GAAP 33,211 32,809 32,075 32,924 33,534 39,281 39,314 39,089 non-GAAP 33,211 32,809 32,496 32,924 33,534 39,920 39,712 39,523


 
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA - AS REPORTED (CONTINUED) ($ in thousands) Three Months Ended June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, 2017 2017 2017 2018 2018 2018 2018 2019 GAAP Operating income $ 23,440 $ 30,159 $ 36,771 $ 33,131 $ 20,649 $ (85,976) $ (24,707) $ (19,259) Inventory valuation adjustment — — — — — 30,395 — — Deferred revenue purchase accounting — — — — — 36,585 28,923 19,316 Acquisition and integration fees — — — 6,252 5,803 26,253 22,274 14,323 Stock-based compensation 9,256 8,762 8,029 7,912 8,150 10,840 11,719 11,225 Restructuring and other related charges 2,573 (51) (84) 13 1,320 7,261 12,130 11,983 Rebranding costs — — — — — — — 5,192 Other adjustments1 1,585 549 — — — — — 1,005 Depreciation and amortization 5,382 5,361 5,151 5,284 5,248 82,398 55,117 58,606 Adjusted EBITDA $ 42,236 $ 44,780 $ 49,867 $ 52,592 $ 41,170 $ 107,756 $ 105,456 $ 102,391 1 Represent immaterial adjustments for loss on sale of assets, write off of indirect tax assets, executive transition costs, and losses from litigation settlements.


 
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