Delaware
|
77-0207692
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification Number)
|
Large
accelerated filer S
|
Accelerated
filer £
|
Non
accelerated filer £
|
PART
I. FINANCIAL INFORMATION
|
Page
No.
|
|
|
Item
1. Financial Statements (Unaudited):
|
|
3
|
|
4
|
|
5
|
|
6
|
|
15
|
|
29
|
|
30
|
|
PART
II. OTHER INFORMATION
|
|
31
|
|
31
|
|
45
|
|
45
|
|
46
|
|
March 31,
|
June 30,
|
||||||
|
2007
|
2007
|
||||||
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ |
94,131
|
$ |
97,093
|
||||
Short-term
investments
|
9,234
|
13,334
|
||||||
Accounts
receivable, net
|
113,758
|
121,705
|
||||||
Inventory
|
126,605
|
136,253
|
||||||
Deferred
income taxes
|
12,659
|
12,874
|
||||||
Other
current assets
|
18,474
|
18,264
|
||||||
Total
current assets
|
374,861
|
399,523
|
||||||
Property,
plant and equipment, net
|
97,259
|
98,653
|
||||||
Intangibles,
net
|
100,120
|
98,080
|
||||||
Goodwill
|
72,825
|
72,825
|
||||||
Other
assets
|
6,239
|
6,197
|
||||||
Total
assets
|
$ |
651,304
|
$ |
675,278
|
||||
|
||||||||
|
||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ |
49,956
|
$ |
46,922
|
||||
Accrued
liabilities
|
54,025
|
58,858
|
||||||
Income
taxes payable
|
12,476
|
3,847
|
||||||
Total
current liabilities
|
116,457
|
109,627
|
||||||
Deferred
tax liability
|
37,344
|
34,746
|
||||||
Long-term
income taxes payable
|
-
|
14,377
|
||||||
Other
long-term liabilities
|
696
|
691
|
||||||
Total
liabilities
|
154,497
|
159,441
|
||||||
|
||||||||
Stockholders'
equity:
|
||||||||
Common
stock
|
666
|
668
|
||||||
Additional
paid-in capital
|
340,661
|
346,768
|
||||||
Accumulated
other comprehensive income
|
2,666
|
2,906
|
||||||
Retained
earnings
|
550,165
|
562,733
|
||||||
|
894,158
|
913,075
|
||||||
Less: Treasury
stock, at cost
|
(397,351 | ) | (397,238 | ) | ||||
Total
stockholders' equity
|
496,807
|
515,837
|
||||||
Total
liabilities and stockholders' equity
|
$ |
651,304
|
$ |
675,278
|
|
Three Months Ended
|
|||||||
|
June 30,
|
|||||||
|
2006
|
2007
|
||||||
Net
revenues
|
$ |
195,069
|
$ |
206,495
|
||||
Cost
of revenues
|
119,470
|
122,949
|
||||||
Gross
profit
|
75,599
|
83,546
|
||||||
Operating
expenses:
|
||||||||
Research,
development and engineering
|
18,659
|
19,488
|
||||||
Selling,
general and administrative
|
44,453
|
46,111
|
||||||
Gain
on sale of land
|
(2,637 | ) |
-
|
|||||
Total
operating expenses
|
60,475
|
65,599
|
||||||
Operating
income
|
15,124
|
17,947
|
||||||
Interest
and other income, net
|
985
|
1,334
|
||||||
Income
before income taxes
|
16,109
|
19,281
|
||||||
Income
tax expense
|
3,818
|
4,306
|
||||||
Net
income
|
$ |
12,291
|
$ |
14,975
|
||||
|
||||||||
Net
income per share - basic
|
$ |
0.26
|
$ |
0.31
|
||||
|
||||||||
Shares
used in basic per share calculations
|
47,157
|
47,835
|
||||||
|
||||||||
Net
income per share - diluted
|
$ |
0.25
|
$ |
0.31
|
||||
|
||||||||
Shares
used in diluted per share calculations
|
48,268
|
48,681
|
||||||
|
||||||||
Cash
dividends declared per common share
|
$ |
0.05
|
$ |
0.05
|
|
Three Months Ended
|
|||||||
|
June 30,
|
|||||||
|
2006
|
2007
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
income
|
$ |
12,291
|
$ |
14,975
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
7,206
|
7,102
|
||||||
Stock-based
compensation
|
4,436
|
4,113
|
||||||
Provision
for (benefit from) doubtful accounts
|
436
|
(213 | ) | |||||
Provision
for excess and obsolete inventories
|
3,300
|
5,388
|
||||||
Benefit
from deferred income taxes
|
(1,179 | ) | (3,472 | ) | ||||
Income
tax benefit associated with stock option exercises
|
182
|
120
|
||||||
Excess
tax benefit from stock-based compensation
|
(108 | ) | (380 | ) | ||||
(Gain)
loss on disposal of property, plant, and equipment, net
|
(2,619 | ) |
7
|
|||||
|
||||||||
Changes
in assets and liabilities:
|
||||||||
Accounts
receivable, net
|
(4,130 | ) | (7,734 | ) | ||||
Inventory
|
(33,260 | ) | (15,037 | ) | ||||
Other
current assets
|
814
|
196
|
||||||
Other
assets
|
657
|
291
|
||||||
Accounts
payable
|
12,478
|
(3,034 | ) | |||||
Accrued
liabilities
|
1,708
|
4,675
|
||||||
Income
taxes payable
|
2,293
|
6,128
|
||||||
Cash
provided by operating activities
|
4,505
|
13,125
|
||||||
|
||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Proceeds
from sales and maturities of short-term investments
|
106,999
|
66,185
|
||||||
Purchase
of short-term investments
|
(98,970 | ) | (70,260 | ) | ||||
Proceeds
from the sale of land
|
2,667
|
-
|
||||||
Restricted
cash held in escrow
|
(2,667 | ) |
-
|
|||||
Capital
expenditures and other assets
|
(9,135 | ) | (6,596 | ) | ||||
Cash
used for investing activities
|
(1,106 | ) | (10,671 | ) | ||||
|
||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Purchase
of treasury stock
|
(4,021 | ) |
-
|
|||||
Proceeds
from sale of treasury stock
|
470
|
375
|
||||||
Proceeds
from issuance of common stock
|
356
|
1,889
|
||||||
Repayment
of line of credit
|
(9,019 | ) |
-
|
|||||
Payment
of cash dividends
|
(2,374 | ) | (2,407 | ) | ||||
Excess
tax benefit from stock-based compensation
|
108
|
380
|
||||||
Cash
(used for) provided by financing activities
|
(14,480 | ) |
237
|
|||||
Effect
of exchange rate changes on cash and cash equivalents
|
864
|
271
|
||||||
Net
increase (decrease) in cash and cash equivalents
|
(10,217 | ) |
2,962
|
|||||
Cash
and cash equivalents at beginning of year
|
68,703
|
94,131
|
||||||
Cash
and cash equivalents at end of year
|
$ |
58,486
|
$ |
97,093
|
|
March 31,
|
June 30,
|
||||||
(in
thousands)
|
2007
|
2007
|
||||||
|
||||||||
Inventory,
net:
|
||||||||
Purchased
parts
|
$ |
57,406
|
$ |
71,351
|
||||
Work
in process
|
6,268
|
6,790
|
||||||
Finished
goods
|
62,931
|
58,112
|
||||||
|
$ |
126,605
|
$ |
136,253
|
||||
|
||||||||
Accrued
liabilities:
|
||||||||
Employee
compensation and benefits
|
$ |
20,574
|
$ |
21,076
|
||||
Warranty
accrual
|
7,240
|
9,369
|
||||||
Accrued
advertising and sales and marketing
|
5,104
|
6,200
|
||||||
Accrued
other
|
21,107
|
22,213
|
||||||
|
$ |
54,025
|
$ |
58,858
|
Warranty
obligation at March 31, 2007
|
$
|
7,240
|
||
Warranty
provision relating to products shipped during the year
|
|
6,804
|
||
Deductions
for warranty claims processed
|
|
(4,675)
|
||
Warranty
obligation at June 30, 2007
|
$
|
9,369
|
Fiscal
Year Ending March 31,
|
||||
Remainder
of 2008
|
$ |
6,119
|
||
2009
|
8,005
|
|||
2010
|
7,545
|
|||
2011
|
7,502
|
|||
2012
|
4,837
|
|||
Thereafter
|
4,972
|
|||
Total
estimated amortization expense
|
$ |
38,980
|
|
Three
Months Ended
|
|||||||
|
June
30,
|
|||||||
(in
thousands)
|
2006
|
2007
|
||||||
|
||||||||
Cost
of revenues
|
$ |
788
|
$ |
641
|
||||
|
||||||||
Research,
development and engineering
|
1,027
|
928
|
||||||
Selling,
general and administrative
|
2,621
|
2,544
|
||||||
Stock-based
compensation expense included in operating expenses
|
3,648
|
3,472
|
||||||
|
||||||||
Total
stock-based compensation
|
4,436
|
4,113
|
||||||
Income
tax benefit
|
(1,445 | ) | (1,309 | ) | ||||
Total
stock-based compensation, net of tax
|
$ |
2,991
|
$ |
2,804
|
||||
|
||||||||
Decrease
in basic and diluted earnings per share
|
$ |
0.06
|
$ |
0.06
|
|
Options
Outstanding
|
|||||||||||||||
|
Number
of Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual
Life
|
Aggregate
Intrinsic Value
|
||||||||||||
|
(in
thousands)
|
|
(in
years)
|
(in
thousands)
|
||||||||||||
Outstanding
at March 31, 2007
|
9,033
|
$ |
26.17
|
|||||||||||||
Options
granted
|
104
|
$ |
24.32
|
|||||||||||||
Options
exercised
|
(119 | ) | $ |
16.14
|
||||||||||||
Options
forfeited or expired
|
(211 | ) | $ |
33.56
|
||||||||||||
Outstanding
at June 30, 2007
|
8,807
|
$ |
26.11
|
4.57
|
$ |
31,520
|
||||||||||
Vested
and expected to vest at June 30, 2007
|
8,462
|
$ |
26.20
|
4.51
|
$ |
30,256
|
||||||||||
Exercisable
at June 30, 2007
|
6,319
|
$ |
27.09
|
3.99
|
$ |
22,172
|
Weighted
|
||||||||
Average
|
||||||||
Number
of
|
Grant Date
|
|||||||
Shares
|
Fair
Value
|
|||||||
|
|
(in
thousands)
|
|
|||||
Non-vested
at March 31, 2007
|
287
|
$ |
27.09
|
|||||
Granted
|
25
|
$ |
25.24
|
|||||
Vested
|
(10 | ) | $ |
29.32
|
||||
Forfeited
|
(14 | ) | $ |
27.15
|
||||
Non-vested
at June 30, 2007
|
288
|
$ |
26.85
|
Three
Months Ended
|
||||||||
June
30,
|
||||||||
Employee
Stock Options
|
2006
|
2007
|
||||||
Expected
volatility
|
40.0 | % | 36.5 | % | ||||
Risk-free
interest rate
|
5.1 | % | 4.6 | % | ||||
Expected
dividends
|
0.9 | % | 0.8 | % | ||||
Expected
life (in years)
|
4.2
|
4.4
|
||||||
Weighted-average
grant date fair value
|
$ |
10.10
|
$ |
8.40
|
|
Three
Months Ended
|
|||||||
June
30,
|
||||||||
(in
thousands)
|
2006
|
2007
|
||||||
Net
income
|
$ |
12,291
|
$ |
14,975
|
||||
Unrealized
loss on cash flow hedges, net of tax
|
(3,660 | ) | (158 | ) | ||||
Foreign
currency translation gain
|
1,247
|
398
|
||||||
Comprehensive
income
|
$ |
9,878
|
$ |
15,215
|
|
Local
Currency
|
USD
Equivalent
|
Position
|
Maturity
|
|||||
EUR
|
24,100
|
$ |
32,631
|
Sell
Euro
|
1
month
|
||||
GBP
|
6,600
|
$ |
13,238
|
Sell
GBP
|
1
month
|
Three
Months Ended
|
||||||||
June
30,
|
||||||||
(in
thousands, except per share data)
|
2006
|
2007
|
||||||
|
|
|
||||||
Net
income
|
$ |
12,291
|
$ |
14,975
|
||||
|
||||||||
Weighted
average shares-basic
|
47,157
|
47,835
|
||||||
Effect
of unvested restricted stock awards
|
26
|
22
|
||||||
Effect
of employee stock options
|
1,085
|
824
|
||||||
Weighted
average shares-diluted
|
48,268
|
48,681
|
||||||
|
||||||||
Earnings
per share-basic
|
$ |
0.26
|
$ |
0.31
|
||||
|
||||||||
Earnings
per share-diluted
|
$ |
0.25
|
$ |
0.31
|
|
Three
Months Ended
|
|||||||
|
June
30,
|
|||||||
(in
thousands)
|
2006
|
2007
|
||||||
|
|
|
||||||
Net
revenues from unaffiliated customers:
|
||||||||
Office
and Contact Center
|
$ |
114,267
|
$ |
132,205
|
||||
Mobile
|
35,806
|
41,238
|
||||||
Gaming
and Computer Audio
|
7,289
|
6,485
|
||||||
Other
Specialty Products
|
6,375
|
5,644
|
||||||
Total
segment net revenues
|
$ |
163,737
|
$ |
185,572
|
Three
Months Ended
|
||||||||
June
30,
|
||||||||
(in
thousands)
|
2006
|
2007
|
||||||
Net
revenues from unaffiliated customers:
|
||||||||
Docking
Audio
|
$ |
17,430
|
$ |
10,291
|
||||
PC
Audio
|
11,852
|
8,448
|
||||||
Other
|
2,050
|
2,184
|
||||||
Total
segment net revenues
|
$ |
31,332
|
$ |
20,923
|
Net
Revenues by Segment
|
||||||||
Three
Months Ended
|
||||||||
|
June
30,
|
|||||||
(in
thousands)
|
2006
|
2007
|
||||||
|
|
|
||||||
Audio
Communications Group
|
$ |
163,737
|
$ |
185,572
|
||||
Audio
Entertainment Group
|
31,332
|
20,923
|
||||||
Consolidated
net revenues
|
$ |
195,069
|
$ |
206,495
|
Gross
Profit (Loss) by Segment
|
||||||||
Three
Months Ended
|
||||||||
|
June
30,
|
|||||||
(in
thousands)
|
2006
|
2007
|
||||||
|
|
|
||||||
Audio
Communications Group
|
$ |
70,073
|
$ |
85,776
|
||||
Audio
Entertainment Group
|
5,526
|
(2,230 | ) | |||||
Consolidated
gross profit
|
$ |
75,599
|
$ |
83,546
|
Operating
Income (Loss) by Segment
|
||||||||
Three
Months Ended
|
||||||||
|
June
30,
|
|||||||
(in
thousands)
|
2006
|
2007
|
||||||
|
|
|
||||||
Audio
Communications Group
|
$ |
20,817
|
$ |
28,986
|
||||
Audio
Entertainment Group
|
(5,693 | ) | (11,039 | ) | ||||
Consolidated
operating income
|
$ |
15,124
|
$ |
17,947
|
Three
Months Ended
|
||||||||
|
June
30,
|
|||||||
(in
thousands)
|
2006
|
2007
|
||||||
|
|
|
||||||
Total
operating income of segments
|
$ |
15,124
|
$ |
17,947
|
||||
Interest
and other income (expense), net
|
985
|
1,334
|
||||||
Income
tax expense
|
(3,818 | ) | (4,306 | ) | ||||
Consolidated
net income
|
$ |
12,291
|
$ |
14,975
|
Three
Months Ended
|
||||||||
|
June
30,
|
|||||||
(in
thousands)
|
2006
|
2007
|
||||||
|
|
|
||||||
Net
revenues from unaffiliated customers:
|
|
|
||||||
United
States
|
$ |
126,900
|
$ |
131,295
|
||||
|
||||||||
Europe,
Middle East and Africa
|
41,938
|
49,430
|
||||||
Asia
Pacific and Latin America
|
19,042
|
19,141
|
||||||
Canada
and other international
|
7,189
|
6,629
|
||||||
Total
international
|
68,169
|
75,200
|
||||||
|
$ |
195,069
|
$ |
206,495
|
|
March
31,
|
June
30,
|
||||||
(in
thousands)
|
2007
|
2007
|
||||||
Property,
plant and equipment, net:
|
|
|
||||||
United
States
|
$ |
48,356
|
$ |
49,184
|
||||
China
|
25,817
|
26,370
|
||||||
Mexico
|
12,734
|
13,028
|
||||||
Other
countries
|
10,352
|
10,071
|
||||||
|
$ |
97,259
|
$ |
98,653
|
|
·
|
Increase
penetration in the office.
Growing
the office markets,
through the introduction of compelling, easy to use, wireless
products and
demand generation campaigns will continue to be our top
priority. We have trained over 3,000 representatives at
customer and partner locations on our products through our
Sound Coach,
which is a mobile trade show booth. We also have new programs
to convert corded headset users to wireless headsets, as well
as to
upgrade existing wireless headset users to our new
CS70N.
|
|
·
|
Upgrade
existing customers with compelling new
products. We announced two new products
within our Voyager family: the Voyager 520 Bluetooth headset,
which features noise-canceling technology for business-quality
performance
and which will be available in August and the Voyager 520 which
emphasizes
voice clarity and communication versatility in an easy-to-operate
design
with a form factor smaller than its predecessor product, the
Voyager 510,
which we will continue to sell. We also announced the new
.Audio 480 Virtual Phone Booth headset for laptop, multimedia,
VoIP and
internet conversations. This is the smallest headset in our
product line and features sound-isolating ear buds and wind-noise
reduction technology.
|
|
·
|
Grow
our Bluetooth market share while improving
profitability. We believe a
significant opportunity to increase our Bluetooth market share
is being
created by the convergence of music and communications in the
cell phone
industry. Our Bluetooth product portfolio is highly competitive
and we believe our existing and next generation products are
well
positioned to gain market share. In addition, we are focused on
reducing the cost of our Bluetooth products. We will continue
to implement our supply chain optimization and re-engineering
initiatives
that are designed to increase inventory turns, improve forecast
accuracy
and reduce excess and obsolete inventory. We increased the
utilization of our China plant, improving direct labor productivity
and
reducing logistics costs. We will continue to increase the
use of common
design platforms from which we can produce multiple generations
of
products.
|
|
·
|
Focus
on the
turnaround plan for Altec Lansing.
Development
of the next
generation products with lower manufacturing costs and higher
margins are
a key priority over the next 18 months. We also plan to take
advantage of the industrial design capabilities that exist
within the ACG
segment to make these next generation products more appealing
to
buyers. During the first quarter of fiscal 2008, we introduced
the iM600, a docking speaker system for the iPod, and announced
the
Upgrader Series of headphones for computers and portable electronic
devices and the PT Series of wireless digital surround sound
speakers for
flat panel TV’s. We are also controlling costs in
AEG
and exploring ways to make this
business more efficient.
|
Consolidated
|
||||||||||||||||
(in
thousands)
|
Three
Months Ended June 30,
|
|||||||||||||||
2006
|
2007
|
|||||||||||||||
Net
revenues
|
$ |
195,069
|
100.0 | % | $ |
206,495
|
100.0 | % | ||||||||
Cost
of revenues
|
119,470
|
61.2 | % |
122,949
|
59.5 | % | ||||||||||
Gross
profit
|
75,599
|
38.8 | % |
83,546
|
40.5 | % | ||||||||||
Operating
expense:
|
||||||||||||||||
Research,
development and engineering
|
18,659
|
9.6 | % |
19,488
|
9.5 | % | ||||||||||
Selling,
general and administrative
|
44,453
|
22.8 | % |
46,111
|
22.3 | % | ||||||||||
Gain
on sale of land
|
(2,637 | ) | (1.4 | )% |
-
|
0.0 | % | |||||||||
Total
operating expenses
|
60,475
|
31.0 | % |
65,599
|
31.8 | % | ||||||||||
Operating
income
|
15,124
|
7.8 | % |
17,947
|
8.7 | % | ||||||||||
Interest
and other income (expense), net
|
985
|
0.5 | % |
1,334
|
0.7 | % | ||||||||||
Income
before income taxes
|
16,109
|
8.3 | % |
19,281
|
9.4 | % | ||||||||||
Income
tax expense
|
3,818
|
2.0 | % |
4,306
|
2.1 | % | ||||||||||
Net
income
|
$ |
12,291
|
6.3 | % | $ |
14,975
|
7.3 | % |
Audio
Communications Group
|
||||||||||||||||
(in
thousands)
|
Three
Months Ended June 30,
|
|||||||||||||||
2006
|
2007
|
|||||||||||||||
Net
revenues
|
$ |
163,737
|
100.0 | % | $ |
185,572
|
100.0 | % | ||||||||
Cost
of revenues
|
93,664
|
57.2 | % |
99,796
|
53.8 | % | ||||||||||
Gross
profit
|
70,073
|
42.8 | % |
85,776
|
46.2 | % | ||||||||||
Operating
expense:
|
||||||||||||||||
Research,
development and engineering
|
16,018
|
9.8 | % |
16,784
|
9.0 | % | ||||||||||
Selling,
general and administrative
|
35,875
|
21.9 | % |
40,006
|
21.6 | % | ||||||||||
Gain
on sale of land
|
(2,637 | ) | (1.6 | )% |
-
|
0.0 | % | |||||||||
Total
operating expenses
|
49,256
|
30.1 | % |
56,790
|
30.6 | % | ||||||||||
Operating
income
|
$ |
20,817
|
12.7 | % | $ |
28,986
|
15.6 | % |
Audio
Entertainment Group
|
||||||||||||||||
(in
thousands)
|
Three
Months Ended June 30,
|
|||||||||||||||
2006
|
2007
|
|||||||||||||||
Net
revenues
|
$ |
31,332
|
100.0 | % | $ |
20,923
|
100.0 | % | ||||||||
Cost
of revenues
|
25,806
|
82.4 | % |
23,153
|
110.7 | % | ||||||||||
Gross
profit (loss)
|
5,526
|
17.6 | % | (2,230 | ) | (10.7 | )% | |||||||||
Operating
expense:
|
||||||||||||||||
Research,
development and engineering
|
2,641
|
8.4 | % |
2,704
|
12.9 | % | ||||||||||
Selling,
general and administrative
|
8,578
|
27.4 | % |
6,105
|
29.2 | % | ||||||||||
Total
operating expenses
|
11,219
|
35.8 | % |
8,809
|
42.1 | % | ||||||||||
Operating
loss
|
$ | (5,693 | ) | (18.2 | )% | $ | (11,039 | ) | (52.8 | )% |
|
Three
Months Ended
|
|||||||||||||||
|
June
30,
|
Increase
|
||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
|
|
|
||||||||||||||
Net
revenues from unaffiliated customers:
|
|
|
||||||||||||||
Office
and Contact Center
|
$ |
114,267
|
$ |
132,205
|
$ |
17,938
|
15.7 | % | ||||||||
Mobile
|
35,806
|
41,238
|
5,432
|
15.2 | % | |||||||||||
Gaming
and Computer Audio
|
7,289
|
6,485
|
(804 | ) | (11.0 | )% | ||||||||||
Other
Specialty Products
|
6,375
|
5,644
|
(731 | ) | (11.5 | )% | ||||||||||
Total
segment net revenues
|
$ |
163,737
|
$ |
185,572
|
$ |
21,835
|
13.3 | % |
Three
Months Ended
|
||||||||||||||||
June
30,
|
Increase
|
|||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
Net
revenues from unaffiliated customers:
|
||||||||||||||||
Docking
Audio
|
$ |
17,430
|
$ |
10,291
|
$ | (7,139 | ) | (41.0 | )% | |||||||
PC
Audio
|
11,852
|
8,448
|
(3,404 | ) | (28.7 | )% | ||||||||||
Other
|
2,050
|
2,184
|
134
|
6.5 | % | |||||||||||
Total
segment net revenues
|
$ |
31,332
|
$ |
20,923
|
$ | (10,409 | ) | (33.2 | )% |
|
·
|
Net
revenues from OCC products increased $17.9 million. Cordless
products, primarily wireless office systems, comprised $11.5
million of
this increase. Net revenues from corded products in the OCC
category increased $6.4 million. Most of the corded revenue
growth was driven internationally in Europe and in Asia
Pacific.
|
|
·
|
Mobile
net revenues increased $5.4 million. Net revenues from
Bluetooth headsets increased $7.8 million, while net revenues
from corded
mobile headsets declined by $2.4
million.
|
|
·
|
Gaming
and Computer Audio product revenues decreased $0.8 million,
primarily due
to competitive pressure in Europe.
|
|
·
|
Other
Specialty Product net revenues, which consist primarily of
our Clarity
products, decreased $0.7 million as some retail customers and
distributors
have reduced the number of Clarity products they
carry.
|
|
·
|
Docking
Audio net revenues decreased primarily as a result of intense
competition
in the MP3 accessories market, particularly in the US, and
our reduced
share of the MP3 accessories
market.
|
|
·
|
PC
Audio net revenues decreased due to increased competition and
price
reductions.
|
Three
Months Ended
|
||||||||||||||||
|
June
30,
|
Increase
|
||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
|
|
|
||||||||||||||
Net
revenues from unaffiliated customers:
|
|
|
||||||||||||||
United
States
|
$ |
126,900
|
$ |
131,295
|
$ |
4,395
|
3.5 | % | ||||||||
|
||||||||||||||||
Europe,
Middle East and Africa
|
41,938
|
49,430
|
7,492
|
17.9 | % | |||||||||||
Asia
Pacific and Latin America
|
19,042
|
19,141
|
99
|
0.5 | % | |||||||||||
Canada
and other international
|
7,189
|
6,629
|
(560 | ) | (7.8 | )% | ||||||||||
Total
international
|
68,169
|
75,200
|
7,031
|
10.3 | % | |||||||||||
|
$ |
195,069
|
$ |
206,495
|
$ |
11,426
|
5.9 | % |
Three
Months Ended
|
||||||||||||||||
June
30,
|
Increase
|
|||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
Consolidated
|
||||||||||||||||
Net
revenues
|
$ |
195,069
|
$ |
206,495
|
$ |
11,426
|
5.9 | % | ||||||||
Cost
of revenues
|
119,470
|
122,949
|
3,479
|
2.9 | % | |||||||||||
Consolidated
gross profit
|
$ |
75,599
|
$ |
83,546
|
$ |
7,947
|
10.5 | % | ||||||||
Consolidated
gross profit %
|
38.8 | % | 40.5 | % |
1.7
|
ppt.
|
||||||||||
Audio
Communications Group
|
||||||||||||||||
Net
revenues
|
$ |
163,737
|
$ |
185,572
|
$ |
21,835
|
13.3 | % | ||||||||
Cost
of revenues
|
93,664
|
99,796
|
6,132
|
6.5 | % | |||||||||||
Segment
gross profit
|
$ |
70,073
|
$ |
85,776
|
$ |
15,703
|
22.4 | % | ||||||||
Segment
gross profit %
|
42.8 | % | 46.2 | % |
3.4
|
ppt.
|
||||||||||
Audio
Entertainment Group
|
||||||||||||||||
Net
revenues
|
$ |
31,332
|
$ |
20,923
|
$ | (10,409 | ) | (33.2 | )% | |||||||
Cost
of revenues
|
25,806
|
23,153
|
(2,653 | ) | (10.3 | )% | ||||||||||
Segment
gross profit (loss)
|
$ |
5,526
|
$ | (2,230 | ) | $ | (7,756 | ) | (140.4 | )% | ||||||
Segment
gross profit (loss) %
|
17.6 | % | (10.7 | )% | (28.3 | ) |
ppt.
|
|
·
|
an
improved product mix with an increase in Office products, which
generally
have a higher gross margin than our Mobile
products;
|
|
·
|
cost
reductions on Bluetooth and wireless office
products;
|
|
·
|
higher
production levels, higher utilization of our China factory, and
better absorption of fixed costs which yielded a 2.1 percentage
point
improvement; and
|
|
·
|
a
$0.9 million reduction in excess and obsolete inventory costs
which
yielded a 0.7 percentage point
improvement.
|
|
·
|
an
increase in excess and obsolete inventory costs of
approximately $3 million;
|
|
·
|
fixed
costs which were flat while net revenue decreased, resulting
in lower
gross margins;
|
|
·
|
product
mix had a negative impact, as there was a smaller proportion
of Docking
Audio product, which generally has higher gross margins than
PC
Audio;
|
|
·
|
increased
competition which negatively impacted pricing;
and
|
Three
Months Ended
|
||||||||||||||||
June
30,
|
Increase
|
|||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
Consolidated
|
||||||||||||||||
Research,
development and engineering
|
$ |
18,659
|
$ |
19,488
|
$ |
829
|
4.4 | % | ||||||||
%
of total consolidated net revenues
|
9.6 | % | 9.5 | % | (0.1 | ) |
ppt.
|
|||||||||
Audio
Communications Group
|
||||||||||||||||
Research,
development and engineering
|
$ |
16,018
|
$ |
16,784
|
$ |
766
|
4.8 | % | ||||||||
%
of total segment net revenues
|
9.8 | % | 9.0 | % | (0.8 | ) |
ppt.
|
|||||||||
Audio
Entertainment Group
|
||||||||||||||||
Research,
development and engineering
|
$ |
2,641
|
$ |
2,704
|
$ |
63
|
2.4 | % | ||||||||
%
of total segment net revenues
|
8.4 | % | 12.9 | % |
4.5
|
ppt.
|
|
·
|
the
design and development of wireless office system
products;
|
|
·
|
Bluetooth
products and technology;
|
|
·
|
product
line platforming; and
|
|
·
|
product
line refresh for AEG
|
Three
Months Ended
|
||||||||||||||||
June
30,
|
Increase
|
|||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
Consolidated
|
||||||||||||||||
Selling,
general and administrative
|
$ |
44,453
|
$ |
46,111
|
$ |
1,658
|
3.7 | % | ||||||||
%
of total consolidated net revenues
|
22.8 | % | 22.3 | % | (0.5 | ) |
ppt.
|
|||||||||
Audio
Communications Group
|
||||||||||||||||
Selling,
general and administrative
|
$ |
35,875
|
$ |
40,006
|
$ |
4,131
|
11.5 | % | ||||||||
%
of total segment net revenues
|
21.9 | % | 21.6 | % | (0.3 | ) |
ppt.
|
|||||||||
Audio
Entertainment Group
|
||||||||||||||||
Selling,
general and administrative
|
$ |
8,578
|
$ |
6,105
|
$ | (2,473 | ) | (28.8 | )% | |||||||
%
of total segment net revenues
|
27.4 | % | 29.2 | % |
1.8
|
ppt.
|
|
·
|
increased
compensation of $2.5 million primarily related to higher headcount
in the
sales and marketing functions; and
|
|
·
|
increased
marketing program expenses of $2.2 million primarily related
to
advertising, outbound telemarketing, product launch and other
demand
generation programs.
|
|
·
|
decreased
compensation of $1.0 million primarily related to employee
turnover and
decreased bonuses reflecting the decreased profit in the
segment;
|
|
·
|
decreased
spending on integration of $0.7 million as we have completed
significant
portions of our planned system
integration;
|
|
·
|
decreased
retail rep commissions due to decreased revenues of $0.4
million; and
|
Three
Months Ended
|
||||||||||||||||
June
30,
|
Increase
|
|||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
Consolidated
|
||||||||||||||||
Operating
income
|
$ |
15,124
|
$ |
17,947
|
$ |
2,823
|
18.7 | % | ||||||||
%
of total consolidated net revenues
|
7.8 | % | 8.7 | % |
0.9
|
ppt.
|
||||||||||
Audio
Communications Group
|
||||||||||||||||
Operating
income
|
$ |
20,817
|
$ |
28,986
|
$ |
8,169
|
39.2 | % | ||||||||
%
of total segment net revenues
|
12.7 | % | 15.6 | % |
2.9
|
ppt.
|
||||||||||
Audio
Entertainment Group
|
||||||||||||||||
Operating
loss
|
$ | (5,693 | ) | $ | (11,039 | ) | $ |
5,346
|
93.9 | % | ||||||
%
of total segment net revenues
|
(18.2 | )% | (52.8 | )% |
34.6
|
ppt.
|
Three
Months Ended
|
||||||||||||||||
June
30,
|
Increase
|
|||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
Consolidated
|
||||||||||||||||
Interest
and other income (expense), net
|
$ |
985
|
$ |
1,334
|
$ |
349
|
35.4 | % | ||||||||
%
of total consolidated net revenues
|
0.5 | % | 0.7 | % |
0.2
|
ppt.
|
Three
Months Ended
|
||||||||||||||||
June
30,
|
Increase
|
|||||||||||||||
(in
thousands)
|
2006
|
2007
|
(Decrease)
|
|||||||||||||
Consolidated
|
||||||||||||||||
Income
before income taxes
|
$ |
16,109
|
$ |
19,281
|
$ |
3,172
|
19.7 | % | ||||||||
Income
tax expense
|
3,818
|
4,306
|
488
|
12.8 | % | |||||||||||
Net
income
|
$ |
12,291
|
$ |
14,975
|
$
|
2,684
|
21.8 | % | ||||||||
Effective
tax rate
|
23.7 | % | 22.3 | % | (1.4 | ) |
ppt.
|
Three
Months Ended
|
||||||||
June
30,
|
||||||||
(in
thousands)
|
2006
|
2007
|
||||||
Cash
provided by operating activities
|
$ |
4,505
|
$ |
13,125
|
||||
Cash
used for capital expenditures and other assets
|
(9,135 | ) | (6,596 | ) | ||||
Cash
provided by (used for) other investing activities
|
8,029
|
(4,075 | ) | |||||
Cash
used for investing activities
|
(1,106 | ) | (10,671 | ) | ||||
Cash
(used for) provided by financing activities
|
$ | (14,480 | ) | $ |
237
|
Payments
Due by Period
|
||||||||||||||||||||||||||||
Remainder
|
||||||||||||||||||||||||||||
of
Fiscal
|
Fiscal
|
Fiscal
|
Fiscal
|
Fiscal
|
||||||||||||||||||||||||
(in
thousands)
|
Total
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
|||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||
Operating
leases
|
$ |
15,552
|
$
|
4,403
|
$
|
3,746
|
$
|
2,296
|
$
|
1,160
|
$
|
921
|
$
|
3,026
|
||||||||||||||
Unconditional
purchase obligations
|
4,376
|
4,376
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Total
contractual cash obligations
|
$ |
19,928
|
$
|
8,779
|
$
|
3,746
|
$
|
2,296
|
$
|
1,160
|
$
|
921
|
$
|
3,026
|
|
|
|
FX
|
FX
|
|||||||||
|
|
|
Gain
(Loss)
|
Gain
(Loss)
|
|||||||||
|
|
USD
Value
|
From
10%
|
From
10%
|
|||||||||
|
|
of
Net FX
|
Appreciation
|
Depreciation
|
|||||||||
Currency
- forward contracts
|
Position
|
Contracts
|
of
USD
|
of
USD
|
|||||||||
Euro
|
Sell
Euro
|
$ |
32.6
|
$ |
3.3
|
$
|
(3.3 | ) | |||||
Great
British Pound
|
Sell
GBP
|
13.2
|
1.3
|
(1.3 | ) | ||||||||
Net
position
|
|
$ |
45.8
|
$ |
4.6
|
$
|
(4.6 | ) |
|
|
FX
|
FX
|
|||||||||
|
Gain
(Loss)
|
Gain
(Loss)
|
||||||||||
USD
Value
|
From
10%
|
From
10%
|
||||||||||
|
of
Net FX
|
Appreciation
|
Depreciation
|
|||||||||
Currency
- option contracts
|
Contracts
|
of
USD
|
of
USD
|
|||||||||
Call
options
|
$ | (109.4 | ) | $ |
2.9
|
$ | (9.7 | ) | ||||
Put
options
|
102.9
|
6.8
|
(1.2 | ) | ||||||||
Net
position
|
$ | (6.5 | ) | $ |
9.7
|
$ | (10.9 | ) |
(a)
|
Evaluation
of disclosure controls and
procedures.
|
(b)
|
Changes
in internal control over financial
reporting
|
|
·
|
Our
operating results are highly
dependent on the volume and timing of orders received during
the quarter,
which are difficult to forecast. Customers generally order
on an as-needed
basis, and we typically do not obtain firm, long-term purchase
commitments
from our customers. As a result, our revenues in any quarter
depend
primarily on orders booked and shipped in that
quarter;
|
|
·
|
We
incur a large portion of our
costs in advance of sales orders because we must plan research
and
production, order components and enter into development, sales
and
marketing, and other operating commitments prior to obtaining
firm
commitments from our customers. In the event we acquire too
much inventory
for certain products, the risk of future inventory write-downs
increases.
In the event we have inadequate inventory to meet the demand
for
particular products, we may miss significant revenue opportunities
or
incur significant expenses such as air freight, expediting
shipments, and
other negative variances in our manufacturing processes as
we attempt to
make up for the shortfall. When a significant portion of our
revenue is derived from new products, forecasting the appropriate
volumes
of production is even more
difficult;
|
|
·
|
In
the ACG segment, our prices
and gross margins are generally lower for sales to Business-to-Consumer
(“B2C”) customers compared to sales to our Business-to-Business (“B2B”)
customers. In addition, our prices and gross margins can vary
significantly by product line as well as within product lines.
Therefore, our profitability depends, in part, on the mix of
our B2B to B2C customers as well as our product mix. In the
AEG
segment, our prices and gross
margins are generally lower for our PC Audio products than
our Docking
Audio products. Therefore, our profitability depends, in part, on
our mix of PC Audio to Docking Audio products. For example, in the
fourth quarter of fiscal 2007, sales of Docking Audio products
declined
substantially, resulting in lower gross margins and increased
operating
losses. The size and timing of opportunities in these markets
are difficult to predict;
|
|
·
|
We
are working to refresh virtually the entire AEG product line;
however,
market adoption of new products is difficult to
predict;
|
|
·
|
A
significant portion of our
annual retail sales for AEG
generally occur in the third
fiscal quarter, thereby increasing the difficulty of predicting
revenues
and profitability from quarter to quarter and in managing inventory
levels;
|
|
·
|
Fluctuations
in currency exchange
rates impact our revenues and profitability because we report
our
financial statements in U.S. dollars, whereas a significant
portion of our
sales to customers are transacted in other currencies, particularly
the
Euro and Great British Pound. Furthermore, fluctuations in
foreign
currencies impact our global pricing strategy resulting in
our lowering or
raising selling prices in a currency in order to avoid disparity
with U.S.
dollar prices and to respond to currency-driven competitive
pricing
actions; and
|
|
·
|
Because
we have significant
manufacturing operations in Mexico and China, fluctuations
in currency
exchange rates in those two countries can impact our gross
profit and
profitability.
|
|
·
|
Although
we generally use
standard raw materials, parts and components for our products,
the high
development costs associated with wireless technologies permit
us to work
with only a single source of silicon chip-sets on any particular
new
product. We, or our chosen supplier of chip-sets, may experience
challenges in designing, developing and manufacturing components
in these
new technologies which could affect our ability to meet market
schedules.
Due to our dependence on single suppliers for certain chip
sets, we could
experience higher prices, a delay in development of the chip-set,
and/or
the inability to meet our customer demand for these new products.
Additionally, these supplier or other suppliers may discontinue
production
of the parts we depend on. If this occurs, we may have difficulty
obtaining sufficient product to meet our needs. This could cause us
to fail to meet customer expectations. If customers turn to our
competitors to meet their needs, there could be a long-term
impact on our
revenues and profitability. Our business, operating results and
financial condition could therefore be materially adversely
affected as a
result of these factors;
|
|
·
|
We
have been put on notice by a single source supplier that
chipsets used in
headsets accounting for approximately 30% of ACG revenues
are subject to
an end-of-life notice. We believe that we will be able to obtain
sufficient quantities of these chipsets to last us for approximately
one
year, and we are exploring opportunities with that supplier
to obtain
greater supplies of the chipset in the future. We also have products
in development that can replace the products that use these
chipsets. These products are currently scheduled for release to
volume production before we expect to exhaust supplies of
the chipset
currently in use. However, development is risky and there can
be no assurance that we will complete the new products on
schedule, that
the cost of those products will be similar to the current
products and/or
that our channels will accept the new products as rapidly
as will be
necessary to maintain revenue continuity. If we are unable to
obtain sufficient supplies of the current chipsets or commence
volume
production of the new products in a timely manner or otherwise
remedy the
situation before the current chipsets become unavailable
it would
materially and adversely affect our business, financial condition
and
results of operations;
|
|
·
|
If
product is available, we may
be unable to predict last time buy quantities accurately and
we may
experience excess or insufficient inventories of product. This could
cause us to either fail to produce sufficient quantities of
products to
fill our customers’ orders or to have larger inventories that could lead
to our writing off un-useable product as being excess and obsolete.
This could have an adverse effect on our financial
results;
|
|
·
|
Rapid
increases in production levels to meet unanticipated demand
could result
in higher costs for components and sub-assemblies, increased
expenditures
for freight to expedite delivery of required materials, and
higher
overtime costs and other expenses. These higher expenditures
could lower
our profit margins. Further, if production is increased rapidly,
there may
be decreased manufacturing yields, which may also lower our
margins;
|
|
·
|
We
obtain certain raw materials,
sub-assemblies, components and products from single suppliers
and
alternate sources for these items are not readily available.
To date, we
have not experienced any significant interruptions in the supply
of these
raw materials, sub-assemblies, components and products. Adverse
economic
conditions could lead to a higher risk of failure of our suppliers
to
remain in business or to be able to purchase the raw materials,
subcomponents and parts required by them to produce and provide
to us the
parts we need. An interruption in supply from any of our single
source
suppliers in the future would materially adversely affect our
business,
financial condition and results of
operations;
|
|
·
|
Prices
of raw materials,
components and sub-assemblies may rise. If this occurs and
we are not able
to pass these increases on to our customers or to achieve operating
efficiencies that would offset the increases, it would have
a material
adverse effect on our business, financial condition and results
of
operations;
|
|
·
|
Due
to the lead times required to
obtain certain raw materials, sub-assemblies, components and
products from
certain foreign suppliers, we may not be able to react quickly
to changes
in demand, potentially resulting in either excess inventories
of such
goods or shortages of the raw materials, sub-assemblies, components
and
products. Lead times are particularly long on silicon-based
components
incorporating radio frequency and digital signal processing
technologies
and such components are an increasingly important part of our
product
costs. In particular, many B2C customer orders have shorter
lead times than the component lead times, making it increasingly
necessary
to carry more inventory in anticipation of those orders, which
may not
materialize. Failure in the future to match the timing of
purchases of raw materials, sub-assemblies, components and
products to
demand could increase our inventories and/or decrease our revenues,
consequently materially adversely affecting our business, financial
condition and results of operations;
and
|
|
·
|
Most
of our suppliers are not
obligated to continue to provide us with raw materials, components
and
sub-assemblies. Rather, we buy most raw materials, components
and
subassemblies on a purchase order basis. If our suppliers experience
increased demand or shortages, it could affect deliveries to
us. In turn,
this would affect our ability to manufacture and sell products
that are
dependent on those raw materials, components and
subassemblies. Any such shortages would materially adversely
affect our business, financial condition and results of
operations.
|
|
·
|
Competition
may continue to
increase in Altec Lansing’s
markets more than
expected;
|
|
·
|
Altec Lansing’s
product sales and new product development may not evolve as
anticipated.
We are currently working on a product refresh which we are
anticipating
will take us at least eighteen months to complete. There is no
assurance that these new products will be successful, and the
length of
time required for this refresh may cause our customers to buy
from our
competitors;
|
|
·
|
We
must be able to meet the
market windows for Altec Lansing’s
products;
|
|
·
|
We
must be able to retain or
obtain shelf space for these products in our sales
channel;
|
|
·
|
We
must retain or improve the
brand recognition associated with the Altec Lansing
brand during the
turnaround;
|
|
·
|
Difficulties
in integration of
the operations, technologies, and products of Altec Lansing.
We
have transitioned a
significant portion of Altec Lansing’s
operations onto our ERP
system; however, we have not completed our integration effort.
There has
been a significant cost to implement new systems and business
processes. We anticipate that there will continue to be significant
business processes and internal controls which will change
as a result of
the integration;
|
|
·
|
Diversion
of management's
attention from normal daily operations of the core
business;
|
|
·
|
The
potential loss of key
employees of Altec Lansing
and Plantronics; and,
|
|
·
|
Cultural
differences in the
conduct of the business.
|
|
·
|
If
forecasted demand does not
develop, we could have excess inventory and excess
capacity. Over-forecast of demand could result in higher
inventories of finished products, components and sub-assemblies.
In
addition, because our retail customers have pronounced seasonality,
we
must build inventory well in advance of the December quarter
in order to
stock up for the anticipated future demand. If we were unable
to sell these inventories, we would have to write off some
or all of our
inventories of excess products and unusable components and
sub-assemblies.
Excess manufacturing capacity could lead to higher production
costs and
lower margins;
|
|
·
|
If
demand increases beyond that
forecasted, we would have to rapidly increase production. We
currently
depend on suppliers to provide additional volumes of components
and
sub-assemblies, and we are experiencing greater dependence
on single
source suppliers; therefore, we might not be able to increase
production
rapidly enough to meet unexpected demand. There could be short-term
losses of sales while we are trying to increase
production;
|
|
·
|
The
introduction of Bluetooth
and other wireless headsets
presents many significant manufacturing, marketing and other
operational
risks and uncertainties:
|
|
·
|
Our
dependence on third parties to supply key components, many
of which have
long lead times;
|
|
·
|
Our
ability to forecast demand for
the variety of products within this new product category for
which
relevant data is incomplete or unavailable;
and
|
|
·
|
Longer
lead times with suppliers
than commitments from some of our
customers.
|
|
·
|
Increasing
production beyond
planned capacity involves increased tooling, test equipment
and hiring and
training additional staff. Lead times to increase tooling and
test
equipment are typically several months, or more. Once such
additional
capacity is in place, we incur increased depreciation and the
resulting
overhead. Should we fail to ramp production once capacity is
in place, we
would not be able to absorb this incremental overhead, and
this could lead
to lower gross margins; and
|
|
·
|
We
are working on a new
initiative to re-engineer our supply chain by implementing
new product
forecasting systems, increasing automation within supply chain
activities,
improving the integrity of our supply chain data, and creating
dashboards
in order to improve our ability to match production to
demand. If we are not able to successfully implement this
initiative, we may not be able to meet demand or compete effectively
with
other companies who have successfully implemented similar
initiatives.
|
|
·
|
Anticipate
technology and market
trends;
|
|
·
|
Develop
innovative new products
and enhancements on a timely
basis;
|
|
·
|
Distinguish
our products from
those of our competitors;
|
|
·
|
Manufacture
and deliver
high-quality products in sufficient volumes;
and
|
|
·
|
Price
our products
competitively.
|
|
·
|
If
supply or demand for iPod
products decreases, demand for certain of our Docking Audio
products could
be negatively affected;
|
|
·
|
If
Apple does not renew or
cancels our licensing agreement, our products may not be compatible
with
iPods, resulting in loss of revenues and excess inventories
which would
negatively impact our financial
results;
|
|
·
|
If
Apple changes its iPod product design more frequently than
we update
certain of our Docking Audio products, certain of our products
may not be
compatible with the changed design. Moreover, if Apple makes
style changes to its products more frequently than we update
certain of
our Docking Audio products, consumers may not like the look
of our
products with the iPod. Both of these factors could result in
decreased demand for our products and excess inventories could
result
which would negatively impact our financial results;
and
|
|
·
|
Apple
has introduced its own line
of iPod speaker products, which compete with certain of our
Altec
Lansing-branded speaker products. As the manufacturer of the
iPod, Apple has unique advantages with regard to product changes
or
introductions that we do not possess, which could negatively
impact our
ability to compete effectively against Apple’s speaker
products. Moreover, certain consumers may prefer to buy Apple’s
iPod speakers rather than other vendors’ speakers because Apple is the
manufacturer. As a result, this could lead to decreased demand
for our products and excess inventories could result which
would
negatively impact our financial
results.
|
|
·
|
New
Product
Launch:
With
the growth of our product portfolio, we experience increased
complexity in
coordinating product development, manufacturing, and shipping.
As this
complexity increases, it places a strain on our ability to
accurately
coordinate the commercial launch of our products with adequate
supply to
meet anticipated customer demand and effective marketing to
stimulate
demand and market acceptance. If we are unable to scale and
improve our
product launch coordination, we could frustrate our customers
and lose
retail shelf space and product
sales;
|
|
·
|
Forecasting,
Planning and
Supply Chain Logistics:
With the growth of our product
portfolio, we also experience increased complexity in forecasting
customer
demand and in planning for production, and transportation and
logistics
management. If we are unable to scale and improve our forecasting,
planning and logistics management, we could frustrate our customers,
lose
product sales or accumulate excess inventory;
and
|
|
·
|
Support
Processes: To
manage the growth
of our operations, we will need to continue to improve our
transaction
processing, operational and financial systems, and procedures
and controls
to effectively manage the increased complexity. If we are unable
to scale
and improve these areas, the consequences could include: delays
in
shipment of product, degradation in levels of customer support,
lost
sales, decreased cash flows, and increased inventory. These
difficulties
could harm or limit our ability to
expand.
|
|
·
|
Uncertain
economic conditions and
the decline in investor confidence in the market
place;
|
|
·
|
Changes
in our published
forecasts of future results of
operations;
|
|
·
|
Quarterly
variations in our or
our competitors' results of operations and changes in market
share;
|
|
·
|
The
announcement of new products
or product enhancements by us or our
competitors;
|
|
·
|
The
loss of services of one or
more of our executive officers or other key
employees;
|
|
·
|
Changes
in earnings estimates or
recommendations by securities
analysts;
|
|
·
|
Developments
in our
industry;
|
|
·
|
Sales
of substantial numbers of
shares of our common stock in the public
market;
|
|
·
|
Integration
of the Altec Lansing
business or market reaction to
future acquisitions;
|
|
·
|
Our
ability to successfully
complete the product refresh for the Altec Lansing
products and turnaround the
AEG
business;
|
|
·
|
General
market conditions;
and
|
|
·
|
Other
factors unrelated to our
operating performance or the operating performance of our
competitors.
|
|
·
|
Cultural
differences in the
conduct of business;
|
|
·
|
Fluctuations
in foreign exchange
rates;
|
|
·
|
Greater
difficulty in accounts
receivable collection and longer collection
periods;
|
|
·
|
Impact
of recessions in economies
outside of the United
States;
|
|
·
|
Reduced
protection for
intellectual property rights in some
countries;
|
|
·
|
Unexpected
changes in regulatory
requirements;
|
|
·
|
Tariffs
and other trade
barriers;
|
|
·
|
Political
conditions in each
country;
|
|
·
|
Management
and operation of an
enterprise spread over various
countries;
|
|
·
|
The
burden and administrative
costs of complying with a wide variety of foreign laws;
and
|
|
·
|
Currency
restrictions.
|
Certification
of the President and CEO Pursuant to Rule
13a-14(a)/15d-14(a).
|
Certification
of Senior VP, Finance and Administration, and CFO Pursuant
to Rule
13a-14(a)/15d-14(a).
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant
to 18
U.S.C. Section 1350.
|
|
PLANTRONICS,
INC.
|
|
Date:
August 8, 2007
|
By:
|
/s/
Barbara V. Scherer
|
|
Barbara
V. Scherer
|
|
Senior Vice President - Finance and Administration and Chief Financial Officer | ||
(Principal Financial Officer and Duly Authorized Officer of the Registrant) |