Plantronics, Inc. (PLT)

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Plantronics (PLT)

Q2 2012 Earnings Call

November 01, 2011 5:00 pm ET


Greg Klaben - Investor Relations

Barbara V. Scherer - Chief Financial Officer, Principal Accounting Officer and Senior Vice President of Finance & Administration

S. Kenneth Kannappan - Chief Executive Officer, President and Executive Director


Sanjit Singh - Wedbush Securities Inc., Research Division

Joanna Makris - Mizuho Securities USA Inc., Research Division

Tavis C. McCourt - Morgan Keegan & Company, Inc., Research Division

John F. Bright - Avondale Partners, LLC, Research Division

Gregory Burns - Sidoti & Company, LLC

Mike Latimore - Northland Securities Inc., Research Division



Good afternoon. My name is Casey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 Fiscal Year 2012 Financial Results Conference Call. [Operator Instructions] Thank you. I would now like to turn the call over to your host, Mr. Greg Klaben. Sir, you may begin.

Greg Klaben

Thanks, Casey. Good afternoon and welcome to Plantronics Second Quarter Fiscal 2012 Financial Results. Joining me today are Ken Kannappan, Plantronics' President and CEO; and Barbara Scherer, Senior Vice President of Finance Administration and CFO.

I'd like to remind you that during the course of today's conference call, we may make certain forward-looking statements that are subject to risks and uncertainties as outlined in today's press release. As we've highlighted before, the risk factors in our press release and SEC filings are not standard boilerplate. We update these risk factors every quarter for significant changes, adding and dropping language and changing the order, depending upon the timing and potential impact of the concerns that we foresee. We believe forecasting results of operations is difficult, and we ask you to focus particular attention on these risk factors that could cause actual results to differ materially from those anticipated by any such statements.

For further information, please refer to the company's forms 10-K, 10-Q, today's press release and other SEC filings. We will be discussing non-GAAP measures during today's call, and we have reconciled these measures in our earnings press release and in our quarterly metric sheet, both available on the Investor Relations section of the Plantronics website.

Plantronics' second quarter fiscal 2012 net revenues were $176.9 million compared with guidance provided in August 1 of $172 million to $177 million. Plantronics' GAAP diluted earnings per share were $0.60 in the second quarter compared with $0.52 in the same quarter of the prior year. Non-GAAP diluted earnings per share was $0.67 compared with $0.58 in the prior year quarter and guidance of $0.58 to $0.63. The difference between GAAP and non-GAAP earnings per share for the second quarter includes stock-based compensation charges and purchase accounting amortizations, both net of the associated tax impact.

With that, I'll turn the call over to Ken.

S. Kenneth Kannappan

Thank you, Greg, and thanks to all of you for joining us. There are 3 key points I'd like to discuss on our second quarter fiscal call. The first is our record financial results. The second is how Smarter Working is driving adoption of Unified Communications, and the third is our leadership position in UC. First, we achieved some key records in the second quarter, including record Unified Communications revenue, record operating income, while continuing to invest in extending our leadership position in the growing Unified Communications market.

Second, we're seeing an increased interest in UC as an enabler of Smarter Working in leading enterprises. While UC has always been a tool for greater collaboration, communication and cost savings, we've been seeing growing interest and awareness of the need to change the way knowledge professionals work. The term Smarter Working recognizes that productivity is optimized by matching working environments and professional interaction to the activities which people are pursuing.

With technologies like UC allowing professionals to be very effective remotely, companies are opening up new avenues of cost savings, including reduced facility space, which lower real estate costs and enable them to be more eco-friendly in the process. Many enterprise are also recognizing productivity gains from allowing employees to work from the location where they can be most effective. Employees at such organizations report higher job satisfaction and motivation.

Smarter Working relies on the fact that people are motivated by 2 key things: exciting projects and working closely with other people in a way that increases engagement, whether that is online and remote or in person. Smarter Working emphasizes a new approach to work. When working in the office, professionals benefit from new, open, collaborative spaces during periods when their work requires collaboration. In other times, immersive, reflective and secluded locations are most conducive to achieving their goals.

Consequently, people often move about and reset groups throughout the day without being confined to conventional offices or conference rooms. UC and collaboration tools help enable this by providing them flexibility to accommodate changes while maintaining communications and integration with other enterprise systems, and the office doesn't need to be a set location. With UC, it is everywhere. I've seen a growing number of growing companies considering and implementing Smarter Working, with greater consulting in the university expertise in this area and positive results for people working in these environments.

One recent example is Commonwealth Bank of Australia, the largest financial institution in the country with over 32,000 employees, which have begun deploying voice on its Microsoft Lync rollout in conjunction with Smarter Working. Their new offices, a twin building, with 6,500 employees has been renovated over the course of 2 years with an array of Smarter Working spaces.

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