Plantronics Announces Fourth Quarter & Fiscal Year 2015 Results

SANTA CRUZ, CA--(Marketwired - April 27, 2015) - Plantronics, Inc. (NYSE: PLT) today announced fourth quarter and fiscal year 2015 results. Highlights of the fourth quarter include the following (comparisons are against the fourth quarter of fiscal year 2014):

• Net revenues were $200.8 million compared with $209.1 million
• GAAP gross margin was 54.4% compared with 53.1%
• • Non-GAAP gross margin was 54.7% compared with 53.5%.
• GAAP operating income was $32.9 million compared with $35.5 million
• • Non-GAAP operating income was $40.4 million compared with $41.7 million
• GAAP diluted earnings per share ("EPS") was $0.61 compared with $0.65
• • Non-GAAP diluted EPS was $0.72 compared with $0.74

Q4 Fiscal Year 2015 GAAP Results
		Q4 2015	Q4 2014	Change (%)
Net revenues		$200.8 million	$209.1 million	(4.0)%
Operating income		$32.9 million	$35.5 million	(7.3)%
	Operating Margin	16.4%	17.0%
Diluted EPS		$0.61	$0.65	(6.2)%

Q4 Fiscal Year 2015 Non-GAAP Results
		Q4 2015	Q4 2014	Change (%)
Operating income		$40.4 million	$41.7 million	(3.1)%
	Operating Margin	20.1%	20.0%
Diluted EPS		$0.72	$0.74	(2.7)%

Fiscal Year 2015 GAAP Results
		2015	2014	Change (%)
Net revenues		$865.0 million	$818.6 million	5.7%
Operating income		$149.1 million	$140.1 million	6.4%
	Operating Margin	17.2%	17.1%
Diluted EPS		$2.63	$2.59	1.5%

Fiscal Year 2015 GAAP Results
		2015	2014	Change (%)
Net revenues		$865.0 million	$818.6 million	5.7%
Operating income		$149.1 million	$140.1 million	6.4%
	Operating Margin	17.2%	17.1%
Diluted EPS		$2.63	$2.59	1.5%

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

"Our fourth quarter revenue results disappointed due primarily to currency headwinds, a decline in the consumer mono Bluetooth market, and a delayed new product introduction," stated Ken Kannappan, President & CEO. "On an annual basis, we achieved solid revenue growth with even better profitability growth. We continue to execute well on our strategy and are maintaining product leadership and innovation in all of our major product categories. We continue to believe in the fundamentals of the Company and that our market position remains strong."

"Our hedging program, along with a lower quarterly share count and lower tax rate mitigated the currency impact to the quarter," said Pam Strayer, Senior Vice President and Chief Financial Officer. "We generated approximately $54 million in cash flow from operations in the fourth quarter of fiscal year 2015 and approximately $154 million for the full fiscal year. We drew $34.5 million on our line of credit to partially fund the purchase of 1.6 million shares of our common stock for $85 million during the quarter. We grew our cash, cash equivalents and short and long term investments position to approximately $482 million.

Enterprise net revenues decreased 1% to $148.7 million in the fourth quarter of fiscal year 2015 compared with $150.5 million in the fourth quarter of fiscal year 2014 driven by a decline in Core enterprise revenue and unfavorable currency rates. Net revenues from UC products, a subset of Enterprise, grew by 5% to $45.8 million in the fourth quarter of fiscal year 2015 compared with $43.6 million in the fourth quarter of fiscal year 2014.

Consumer net revenues were $52.1 million in the fourth quarter of fiscal year 2015, down from $58.6 million in the fourth quarter of fiscal year 2014, due to several factors, including a decline in the mono Bluetooth market and the bankruptcy of a large U.S. retailer.

Plantronics Announces Quarterly Dividend of $0.15
We are also announcing that we have declared a quarterly dividend of $0.15 per common share, to be paid on June 10, 2015 to all shareholders of record as of the close of business on May 20, 2015.

Business Outlook
The following statements are based on our current expectations and many of these statements are forward-looking. Actual results are subject to a variety of risks and uncertainties and may differ materially from our expectations.

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

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

Subject to the foregoing, we currently expect the following range of financial results for the first quarter of fiscal year 2016:

• Net revenues of $202 million to $212 million; 
• GAAP operating income of $26 million to $31 million;
• Non-GAAP operating income of $34 million to $39 million, excluding the impact of $8 million from stock-based compensation and purchase accounting amortization from GAAP operating income;
• Assuming approximately 40 million diluted average weighted shares outstanding:
• • GAAP diluted EPS of $0.48 to $0.57; 
  • Non-GAAP diluted EPS of $0.62 to $0.71; and
  • Cost of stock-based compensation and purchase accounting amortization to be approximately $0.14 per diluted share.

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

Conference Call Scheduled to Discuss Financial Results
We have scheduled a conference call to discuss fourth quarter and full year fiscal year 2015 results. The conference call will take place today, April 27, 2015, at 6:00 AM (Pacific Time). All interested investors and potential investors in our stock are invited to participate. To listen to the call, please dial in five to ten minutes prior to the scheduled starting time and refer to the "Plantronics Conference Call." Participants from North America should call [phone] and other participants should call [phone].

A replay of the call with the conference ID # 13097180 will be available until May 27, 2015 at [phone] or [phone] for callers from North America and at [phone] for all other callers. The conference call will also be simultaneously webcast in the Investor Relations section of our corporate website at www.plantronics.com/ir, and the webcast of the conference call will remain available on our website for one month.

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

Use of Non-GAAP Financial Information
To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of operating results, which are adjusted to exclude certain non-cash expenses and charges from non-GAAP operating income, non-GAAP operating margin and non-GAAP diluted EPS, including stock-based compensation related to stock options, restricted stock and employee stock purchases made under our employee stock purchase plan, purchase accounting amortization, accelerated depreciation, and early lease termination charges, all net of the associated tax impact, tax benefits from the release of tax reserves, transfer pricing, tax deduction and tax credit adjustments, and the impact of tax law changes. We exclude these expenses from our non-GAAP measures primarily because Plantronics' management does not believe they are part of our target operating model. We believe that the use of non-GAAP financial measures provides meaningful supplemental information regarding our performance and liquidity and helps investors compare actual results with our long-term target operating model goals. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods; however, non-GAAP financial measures are not meant to be considered in isolation or as a substitute for, or superior to, gross margin, operating income, operating margin, net income or EPS prepared in accordance with GAAP.

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 belief in our fundamentals and market positions; (ii) our estimates of GAAP and non-GAAP financial results for the first quarter of fiscal year 2016, including net revenues, operating income and diluted EPS; (iv) our estimates of stock-based compensation and purchase accounting amortization and other related charges, as well as the impact of these non-cash expenses on Non-GAAP operating income and diluted EPS for the first quarter of fiscal year 2016; and (v) our estimate of weighted average shares outstanding for the first quarter of fiscal year 2016, in addition to other matters discussed in this press release that are not purely historical data. We do not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by such statements. Among the factors that could cause actual results to differ materially from those contemplated are:

• Micro and macro economic conditions in our domestic and international markets;
• our ability to realize and achieve positive financial results projected to arise from UC adoption could be adversely affected by a variety of factors including the following: (i) as UC becomes more widely adopted, the risk that competitors will offer solutions that will effectively commoditize our headsets which, in turn, will reduce the sales prices for our headsets; (ii) our plans are dependent upon adoption of our UC solution by major platform providers and strategic partners such as Microsoft Corporation, Cisco Systems, Inc., Avaya, Inc., and Alcatel-Lucent, and our influence over such providers with respect to the functionality of their platforms or their product offerings, their rate of deployment, and their willingness to integrate their platforms and product offerings with our solutions is limited; (iii) delays or limitations on our ability to timely introduce solutions that are cost effective, feature-rich, stable, and attractive to our customers within forecasted development budgets; (iv) our successful implementation and execution new and different processes involving the design, development, and manufacturing of complex electronic systems composed of hardware, firmware, and software that works seamlessly and continuously in a wide variety of environments and with multiple devices; (v) our sales model and expertise must successfully evolve to support complex integration of hardware and software with UC infrastructure consistent with changing customer purchasing expectations; (vi) as UC becomes more widely adopted we anticipate that competition for market share will increase, particularly given that some competitors may have superior technical and economic resources; (vii) UC solutions generally, or our solutions in particular, may not be adopted with the breadth and speed in the marketplace that we currently anticipate; (viii) sales cycles for more complex UC deployments are longer as compared to our traditional Enterprise products; (ix) UC may evolve rapidly and unpredictably and our inability to timely and cost-effectively adapt to those changes and future requirements may impact our profitability in this market and our overall margins; and (x) our failure to expand our technical support capabilities to support the complex and proprietary platforms in which our UC products are and will be integrated;
• failure to match production to demand given long lead times and the difficulty of forecasting unit volumes and acquiring the component parts and materials to meet demand without having excess inventory or incurring cancellation charges;
• volatility in prices from our suppliers, including our manufacturers located in China, have in the past and could in the future negatively affect our profitability and/or market share;
• fluctuations in foreign exchange rates;
• with respect to our stock repurchase program, prevailing stock market conditions generally, and the price of our stock specifically;
• the bankruptcy or financial weakness of distributors or key customers, or the bankruptcy of or reduction in capacity of our key suppliers;
• additional risk factors including: interruption in the supply of sole-sourced critical components, continuity of component supply at costs consistent with our plans, and the inherent risks of our substantial foreign operations; and
• seasonality in one or more of our product categories.

For more information concerning these and other possible risks, please refer to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 16, 2014 and other filings with the Securities and Exchange Commission, as well as recent press releases. The Securities and Exchange Commission filings can be accessed over the Internet at http://www.sec.gov/edgar/searchedgar/companysearch.html

Financial Summaries

The following related charts are provided:

• Summary Unaudited Condensed Consolidated Financial Statements
• Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures
• Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and Other Unaudited GAAP Data

About Plantronics

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

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

PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share data)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
			Three Months Ended								Twelve Months Ended
			March 31,								March 31,
			2015				2014				2015				2014
Net revenues			$	200,762			$	209,070			$	865,010			$	818,607
Cost of revenues				91,596				98,015				403,391				391,979
Gross profit				109,166				111,055				461,619				426,628
	Gross profit %			54.4	%			53.1	%			53.4	%			52.1	%
Research, development and engineering				22,347				22,453				91,627				84,781
Selling, general and administrative				54,813				53,105				229,569				201,176
Gain from litigation settlements				(846	)			-				(8,662	)			-
Restructuring and other related charges								-				-				547
	Total operating expenses			76,314				75,558				312,534				286,504
		Operating income		32,852				35,497				149,085				140,124
		Operating income %		16.4	%			17.0	%			17.2	%			17.1	%
Interest and other income (expense), net				(2,151	)			956				(3,834	)			1,015
Income before income taxes				30,701				36,453				145,251				141,139
Income tax expense				4,877				8,510				32,950				28,722
		Net income	$	25,824			$	27,943			$	112,301			$	112,417
		% of net revenues		12.9	%			13.4	%			13.0	%			13.7	%
Earnings per common share:
	Basic		$	0.62			$	0.67			$	2.69			$	2.65
	Diluted		$	0.61			$	0.65			$	2.63			$	2.59
Shares used in computing earnings per common share:
	Basic			41,606				41,866				41,723				42,452
	Diluted			42,482				42,697				42,643				43,364
Effective tax rate				15.9	%			23.3	%			22.7	%			20.4	%

PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands)
UNAUDITED CONSOLIDATED BALANCE SHEETS
			March 31,			March 31,
			2015			2014
ASSETS
	Cash and cash equivalents		$	276,850		$	232,704
	Short-term investments			97,859			102,717
		Total cash, cash equivalents and short-term investments		374,709			335,421
	Accounts receivable, net			136,581			138,301
	Inventory, net			56,676			57,132
	Deferred tax assets			6,564			11,776
	Other current assets			28,124			13,657
		Total current assets		602,654			556,287
	Long-term investments			107,590			100,342
	Property, plant and equipment, net			139,413			134,402
	Goodwill and purchased intangibles, net			16,077			16,165
	Other assets			10,308			4,619
		Total assets	$	876,042		$	811,815
LIABILITIES AND STOCKHOLDERS' EQUITY
	Accounts payable		$	32,781		$	30,756
	Accrued liabilities			62,041			66,851
		Total current liabilities		94,822			97,607
	Long-term income taxes payable			12,984			12,719
	Revolving line of credit			34,500			-
	Other long-term liabilities			6,339			2,825
		Total liabilities		148,645			113,151
	Stockholders' equity			727,397			698,664
		Total liabilities and stockholders' equity	$	876,042		$	811,815

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,
				2015				2014				2015				2014
Cash flows from operating activities
	Net Income			$	25,824			$	27,943			$	112,301			$	112,417
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			4,736				3,895				18,711				15,566
		Stock-based compensation			7,472				6,184				28,594				23,180
		Excess tax benefit from stock-based compensation			(532	)			(225	)			(3,520	)			(4,659	)
		Deferred income taxes			(2,634	)			(6,343	)			(980	)			(5,813	)
		Provision for excess and obsolete inventories			(61	)			(281	)			931				4,138
		Other operating activities			(1,672	)			638				(1,188	)			1,983
	Changes in assets and liabilities:
		Accounts receivable, net			22,751				(4,597	)			4,272				(11,136	)
		Inventory, net			1,048				9,175				128				6,040
		Current and other assets			(688	)			529				(5,368	)			1,355
		Accounts payable			(2,457	)			4,028				(62	)			(6,311	)
		Accrued liabilities			(2,964	)			(1,806	)			500				(418	)
		Income taxes			3,239				10,229				119				5,149
			Cash provided by operating activities		54,062				49,369				154,438				141,491
Cash flows from investing activities
	Proceeds from sale of investments				23,565				12,732				96,129				102,414
	Proceeds from maturities of investments				18,255				42,745				120,430				137,955
	Purchase of investments				(43,256	)			(65,519	)			(216,013	)			(247,355	)
	Acquisitions, net of cash acquired				-				-				(150	)			-
	Capital expenditures				(2,748	)			(13,328	)			(21,962	)			(50,985	)
		Cash provided by (used for) investing activities			(4,184	)			(23,370	)			(21,566	)			(57,971	)
Cash flows from financing activities
	Repurchase of common stock				(85,496	)			(28,900	)			(112,939	)			(85,654	)
	Employees' tax withheld and paid for restricted stock and restricted stock units				(305	)			(208	)			(7,611	)			(6,222	)
	Proceeds from issuances under stock-based compensation plans				5,221				4,456				23,042				24,055
	Proceeds from revolving line of credit				34,500				-				34,500				-
	Repayments of revolving line of credit				-				-				-				-
	Payment of cash dividends				(6,434	)			(4,267	)			(25,730	)			(17,372	)
	Excess tax benefit from stock-based compensation				532				225				3,520				4,659
	Cash used for financing activities				(51,982	)			(28,694	)			(85,218	)			(80,534	)
Effect of exchange rate changes on cash and cash equivalents					(1,396	)			(135	)			(3,508	)			942
	Net increase (decrease) in cash and cash equivalents				(3,500	)			(2,830	)			44,146				3,928
Cash and cash equivalents at beginning of period					280,350				235,534				232,704				228,776
Cash and cash equivalents at end of period				$	276,850			$	232,704			$	276,850			$	232,704

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,
		2015				2014				2015				2014
GAAP Gross profit		$	109,166			$	111,055			$	461,619			$	426,628
	Stock-based compensation		695				695				2,583				2,554
	Accelerated depreciation		-				-				-				261
	Lease termination charges		-				-				-				1,388
Non-GAAP Gross profit		$	109,861			$	111,750			$	464,202			$	430,831
Non-GAAP Gross profit %			54.7	%			53.5	%			53.7	%			52.6	%
GAAP Research, development and engineering		$	22,347			$	22,453			$	91,627			$	84,781
	Stock-based compensation		(2,119	)			(1,696	)			(8,053	)			(6,404	)
	Accelerated depreciation		-				-				-				(200	)
	Lease termination charges		-				-				-				(21	)
	Purchase accounting amortization		(63	)			(50	)			(238	)			(200	)
Non-GAAP Research, development and engineering		$	20,165			$	20,707			$	83,336			$	77,956
GAAP Selling, general and administrative		$	54,813			$	53,105			$	229,569			$	201,176
	Stock-based compensation		(4,655	)			(3,794	)			(17,955	)			(14,222	)
	Lease termination charges		-				-				-				(45	)
	Purchase accounting amortization		-				-				-				(106	)
Non-GAAP Selling, general and administrative		$	50,158			$	49,311			$	211,614			$	186,803
GAAP Operating expenses		$	76,314			$	75,558			$	312,534			$	286,504
	Stock-based compensation		(6,774	)			(5,490	)			(26,008	)			(20,626	)
	Accelerated depreciation		-				-				-				(200	)
	Lease termination charges		-				-				-				(66	)
	Purchase accounting amortization		(63	)			(50	)			(238	)			(306	)
	Restructuring and other related charges		-				-				-				(547	)
Non-GAAP Operating expenses		$	69,477			$	70,018			$	286,288			$	264,759

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,
		2015				2014				2015				2014
GAAP Operating income		$	32,852			$	35,497			$	149,085			$	140,124
	Stock-based compensation		7,469				6,185				28,591				23,180
	Accelerated depreciation		-				-				-				461
	Lease termination charges		-				-				-				1,454
	Purchase accounting amortization		63				50				238				306
	Restructuring and other related charges		-				-				-				547
Non-GAAP Operating income		$	40,384			$	41,732			$	177,914			$	166,072
GAAP Net income		$	25,824			$	27,943			$	112,301			$	112,417
	Stock-based compensation		7,469				6,185				28,591				23,180
	Accelerated depreciation		-				-				-				461
	Lease termination charges		-				-				-				1,454
	Purchase accounting amortization		63				50				238				306
	Restructuring and other related charges		-				-				-				547
	Income tax effect of above items		(2,252	)			(1,738	)			(8,506	)			(7,498	)
	Income tax effect of unusual tax items		(489	)			(650	)			(2,864	)			(7,432	)
Non-GAAP Net income		$	30,615			$	31,790			$	129,760			$	123,435
GAAP Diluted earnings per common share		$	0.61			$	0.65			$	2.63			$	2.59
	Stock-based compensation		0.17				0.14				0.67				0.53
	Accelerated depreciation		-				-				-				0.01
	Lease termination charges		-				-				-				0.03
	Restructuring and other related charges		-				-				-				0.02
	Income tax effect		(0.06	)			(0.05	)			(0.26	)			(0.33	)
Non-GAAP Diluted earnings per common share		$	0.72			$	0.74			$	3.04			$	2.85
Shares used in diluted earnings per common share calculation			42,482				42,697				42,643				43,364

Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and other Unaudited GAAP Data
($ in thousands, except per share data)
		Q114				Q214				Q314				Q414				Q115				Q215				Q315				Q415
GAAP Gross profit		$	105,632			$	99,614			$	110,327			$	111,055			$	114,710			$	117,827			$	119,916			$	109,166
	Stock-based compensation		535				638				686				695				535				668				685				695
	Accelerated depreciation		220				41				-				-				-				-				-				-
	Lease termination charges		262				1,126				-				-				-				-				-				-
Non-GAAP Gross profit		$	106,649			$	101,419			$	111,013			$	111,750			$	115,245			$	118,495			$	120,601			$	109,861
Non-GAAP Gross profit %			52.6	%			52.3	%			52.2	%			53.5	%			53.2	%			54.9	%			52.0	%			54.7	%
GAAP Operating expenses		$	69,683			$	68,778			$	72,485			$	75,558			$	76,949			$	79,969			$	79,302			$	76,314
	Stock-based compensation		(4,452	)			(5,327	)			(5,357	)			(5,490	)			(5,770	)			(6,719	)			(6,745	)			(6,774	)
	Accelerated depreciation		(151	)			(49	)			-				-				-				-				-				-
	Lease termination charges		-				(66	)			-				-				-				-				-				-
	Purchase accounting amortization		(121	)			(85	)			(50	)			(50	)			(50	)			(61	)			(64	)			(63	)
	Restructuring and other related charges		(723	)			176				-				-				-				-				-				-
Non-GAAP Operating expenses		$	64,236			$	63,427			$	67,078			$	70,018			$	71,129			$	73,189			$	72,493			$	69,477
GAAP Operating income		$	35,949			$	30,836			$	37,842			$	35,497			$	37,761			$	37,858			$	40,614			$	32,852
	Stock-based compensation		4,987				5,965				6,043				6,185				6,305				7,387				7,430				7,469
	Accelerated depreciation		371				90				-				-				-				-				-				-
	Lease termination charges		262				1,192				-				-				-				-				-				-
	Purchase accounting amortization		121				85				50				50				50				61				64				63
	Restructuring and other related charges		723				(176	)			-				-				-				-				-				-
Non-GAAP Operating income		$	42,413			$	37,992			$	43,935			$	41,732			$	44,116			$	45,306			$	48,108			$	40,384
Non-GAAP Operating income %			20.9	%			19.6	%			20.7	%			20.0	%			20.4	%			21.0	%			20.8	%			20.1	%
GAAP Income before income taxes		$	35,463			$	31,195			$	38,028			$	36,453			$	38,781			$	37,173			$	38,596			$	30,701
	Stock-based compensation		4,987				5,965				6,043				6,185				6,305				7,387				7,430				7,469
	Accelerated depreciation		371				90				-				-				-				-				-				-
	Lease termination charges		262				1,192				-				-				-				-				-				-
	Purchase accounting amortization		121				85				50				50				50				61				64				63
	Restructuring and other related charges		723				(176	)			-				-				-				-				-				-
Non-GAAP Income before income taxes		$	41,927			$	38,351			$	44,121			$	42,688			$	45,136			$	44,621			$	46,090			$	38,233
GAAP Income tax expense		$	8,510			$	8,057			$	3,645			$	8,510			$	10,109			$	9,752			$	8,212			$	4,877
	Income tax effect of above items		1,889				2,072				1,799				1,738				1,800				2,250				2,204				2,252
	Income tax effect of unusual tax items		935				226				5,621				650				273				74				2,028				489
Non-GAAP Income tax expense		$	11,334			$	10,355			$	11,065			$	10,898			$	12,182			$	12,076			$	12,444			$	7,618
Non-GAAP Income tax expense as a % of Non-GAAP Income before income taxes			27.0	%			27.0	%			25.1	%			25.5	%			27.0	%			27.1	%			27.0	%			19.9	%

Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and other Unaudited GAAP Data (Continued)
($ in thousands, except per share data)
			Q114				Q214				Q314				Q414				Q115				Q215				Q315				Q415
GAAP Net income			$	26,953			$	23,138			$	34,383			$	27,943			$	28,672			$	27,421			$	30,384			$	25,824
	Stock-based compensation			4,987				5,965				6,043				6,185				6,305				7,387				7,430				7,469
	Accelerated depreciation			371				90				-				-				-				-				-				-
	Lease termination charges			262				1,192				-				-				-				-				-				-
	Purchase accounting amortization			121				85				50				50				50				61				64				63
	Restructuring and other related charges			723				(176	)			-				-				-				-				-				-
	Income tax effect of above items			(1,889	)			(2,072	)			(1,799	)			(1,738	)			(1,800	)			(2,250	)			(2,204	)			(2,252	)
	Income tax effect of unusual tax items			(935	)			(226	)			(5,621	)			(650	)			(273	)			(74	)			(2,028	)			(489	)
Non-GAAP Net income			$	30,593			$	27,996			$	33,056			$	31,790			$	32,954			$	32,545			$	33,646			$	30,615
GAAP Diluted earnings per common share			$	0.62			$	0.53			$	0.80			$	0.65			$	0.68			$	0.65			$	0.71			$	0.61
	Stock-based compensation			0.11				0.14				0.14				0.14				0.15				0.17				0.18				0.17
	Accelerated depreciation			0.01				-				-				-				-				-				-				-
	Lease termination charges			0.01				0.02				-				-				-				-				-				-
	Restructuring and other related charges			0.02				-				-				-				-				-				-				-
	Income tax effect			(0.07	)			(0.05	)			(0.18	)			(0.05	)			(0.05	)			(0.05	)			(0.10	)			(0.06	)
Non-GAAP Diluted earnings per common share			$	0.70			$	0.64			$	0.76			$	0.74			$	0.78			$	0.77			$	0.79			$	0.72
Shares used in diluted earnings per common share calculation				43,650				43,597				43,228				42,697				42,466				42,505				42,700				42,482
SUMMARY OF UNAUDITED GAAP DATA
($ in thousands)
Net revenues from unaffiliated customers:
	Enterprise		$	151,183			$	139,945			$	146,636			$	150,501			$	152,353			$	156,680			$	161,591			$	148,660
	Consumer			51,635				54,035				66,103				58,569				64,309				59,125				70,190				52,102
		Total net revenues	$	202,818			$	193,980			$	212,739			$	209,070			$	216,662			$	215,805			$	231,781			$	200,762
Net revenues by geographic area from unaffiliated customers:
	Domestic		$	121,318			$	115,795			$	113,042			$	125,123			$	124,467			$	123,697			$	123,092			$	116,351
	International			81,500				78,185				99,697				83,947				92,195				92,108				108,689				84,411
		Total net revenues	$	202,818			$	193,980			$	212,739			$	209,070			$	216,662			$	215,805			$	231,781			$	200,762
Balance Sheet accounts and metrics:
Accounts receivable, net			$	120,903			$	123,748			$	133,379			$	138,301			$	150,765			$	140,427			$	157,322			$	136,581
Days sales outstanding (DSO)				54				57				56				60				63				59				61				61
Inventory, net			$	65,314			$	69,150			$	66,569			$	57,132			$	60,968			$	63,551			$	57,724			$	56,676
Inventory turns				6.0				5.5				6.2				6.9				6.7				6.2				7.8				6.5

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