Poly Announces Fourth Quarter and Full-Year Fiscal 2022 Financial Results

Press Releases

May 27, 2022

SANTA CRUZ, Calif., May 27, 2022 /PRNewswire/ — Poly (NYSE: POLY), a global outfitter of professional-grade audio and video technology, today announced fourth quarter results for the period ended April 2, 2022.

Highlights for the fourth quarter and full-year fiscal 2022 include:
  • On March 28, 2022, Poly announced it had entered into a definitive merger agreement with HP, Inc. (NYSE: HPQ), a leading global provider of workplace solutions, in an all-cash transaction for $40 per share, implying a total enterprise value of approximately $3.3 billion, inclusive of Poly’s net debt.

  • GAAP revenues for fiscal Q4 were $421M, a 12% year-over-year decline driven primarily by supply chain constraints impacting all product categories. Voice revenue grew 13% year over year but was offset by declines in Headsets and Video of -17% and -11%, respectively. Services revenue declined 20% from the prior year quarter.

  • For full fiscal year 2022 non-GAAP revenues declined -3% driven primarily by supply chain constraints. Video revenue of $485M was up 14% and Voice revenue of $247M was up 12% from the prior year. This was offset by Headset and Services revenues of $723M and $230M, which were down 12% and 15%, respectively, from the prior year.

  • Geographically for fiscal Q4, Americas revenue of $214M was down 8%, EMEA revenue of $144M was down 16%, and APAC revenue of $64M was down 14% from the prior year. For full-year fiscal 2022, Americas revenue of $890M was up 2%, EMEA revenue of $516M was down 11%, and APAC revenue of $279M was down 5% from the prior year.

  • Fiscal Q4 Non-GAAP gross margins of 43.9% were down 450bps from the prior year quarter. For the full year of fiscal 2022, gross margins declined 440bps, to 45.1%. The fiscal Q4 and full year gross margin declines were driven primarily by increased logistics costs and spot market purchases associated with global supply chain disruptions.

  • Poly continues to expand its portfolio of smart devices with the introduction of the Poly Studio R30 video bar, the Poly Sync 10 speakerphone, and enhancements to the Poly Lens platform. These solutions, combined with Poly DirectorAI smart camera technology, help employees look and sound their best, while employers can maintain focus on delivering meeting equity for hybrid and office workers alike.

 

($ Millions, except percent and per-share data)1

Q4 FY22

Q4 FY21

YTD FY22

YTD FY21

GAAP Revenue

$421

$476

$1,681

$1,728

GAAP Gross Margin

39.6  %

44.7  %

40.8  %

44.9  %

GAAP Operating (Loss) Income

($17)

$34

($32)

$13

GAAP Diluted EPS

($0.72)

$0.25

$0.41

($1.40)

Cash Flow from Operations

($8)

$74

($8)

$145

Non-GAAP Revenue

$422

$478

$1,685

$1,742

Non-GAAP Gross Margin

43.9  %

48.4%

45.1  %

49.5%

Non-GAAP Operating Income

$35

$76

$178

$262

Non-GAAP Diluted EPS

$0.50

$1.23

$2.44

$3.99

Adjusted EBITDA

$43

$86

$214

$302

1

For further information on supplemental non-GAAP metrics, refer to the Use of Non-GAAP Financial Information and Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures sections below.

Business Outlook and Conference Call

In light of the pending merger of Poly with HP, Inc., Poly will not provide fiscal 2023 guidance and will not hold a conference call to discuss these results.

About Poly

Poly (NYSE: POLY) creates premium audio and video products so you can have your best meeting — anywhere, anytime, every time. Our headsets, video and audio-conferencing products, desk phones, analytics software and services are beautifully designed and engineered to connect people with incredible clarity. They’re pro-grade, easy to use and work seamlessly with all the best video and audio-conferencing services. Poly MeetingAI delivers a broadcast quality video conferencing experience with Poly DirectorAI technology which uses artificial intelligence and machine learning to deliver real-time automatic transitions, framing and tracking, while NoiseBlockAI and Acoustic Fence technologies block-out unwanted background noise. With Poly (Plantronics, Inc. – formerly Plantronics and Polycom), you’ll do more than just show up, you’ll stand out. For more information visit www.Poly.com.

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

Vice President, Corporate Communications

(213) 369-3719

 

PLANTRONICS, INC.

SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except percentages and per share data)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Twelve Months Ended

April 2,

April 3,

April 2,

April 3,

2022

2021

2022

2021

Net revenues

   Net product revenues

$            369,178

$            410,980

$         1,455,785

$         1,470,826

   Net services revenues

52,204

65,253

225,359

256,781

     Total net revenues

421,382

476,233

1,681,144

1,727,607

Cost of revenues

   Cost of product revenues

235,151

240,811

917,511

863,529

   Cost of service revenues

19,206

22,606

77,540

87,527

     Total cost of revenues

254,357

263,417

995,051

951,056

Gross profit

167,025

212,816

686,093

776,551

   % of total net revenues

39.6 %

44.7 %

40.8 %

44.9 %

Operating expenses

   Research, development, and engineering

47,463

52,963

183,553

209,290

   Selling, general, and administrative

135,422

126,487

499,839

488,378

   Loss, net from litigation settlements

17,561

   Restructuring and other related charges

960

(773)

34,937

48,704

     Total operating expenses

183,845

178,677

718,329

763,933

Operating (loss) income

(16,820)

34,139

(32,236)

12,618

   % of total net revenues

(4.0) %

7.2 %

(1.9) %

0.7 %

Interest expense

15,840

24,424

69,711

82,606

Other non-operating expense (income), net

1,955

(920)

291

(5,108)

(Loss) income before income taxes

(34,615)

10,636

(102,238)

(64,880)

Income tax benefit

(3,722)

(341)

(120,155)

(7,549)

     Net (loss) income

$          (30,893)

$              10,977

$            17,917

$            (57,331)

       % of total net revenues

(7.3) %

2.3 %

1.1 %

(3.3) %

Basic (loss) earnings per common share

$               (0.72)

$                 0.26

$                 0.42

$               (1.40)

Diluted (loss) earnings per common share

$               (0.72)

$                 0.25

$                 0.41

$               (1.40)

Basic shares used in computing (loss) earnings per common share

42,922

41,482

42,568

41,044

Diluted shares used in computing (loss) earnings per common share

42,922

43,498

43,942

41,044

Effective tax rate

10.8 %

(3.2) %

117.5 %

11.6  %

 

PLANTRONICS, INC.

SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

April 2,

April 3,

2022

2021

ASSETS

   Cash and cash equivalents

$                         170,000

$                         202,560

   Restricted cash

493,908

   Short-term investments

13,703

14,559

     Total cash and cash equivalents, restricted cash, and short-term investments

183,703

711,027

   Accounts receivable, net

277,924

267,464

   Inventory, net

234,102

194,405

   Other current assets

83,410

65,214

     Total current assets

779,139

1,238,110

   Property, plant, and equipment, net

127,021

140,875

   Purchased intangibles, net

230,478

341,614

   Goodwill

796,216

796,216

   Deferred tax and other non-current assets

292,500

147,454

     Total assets

$                     2,225,354

$                     2,664,269

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

   Accounts payable

$                         168,610

$                         151,244

   Accrued liabilities

338,836

394,084

   Current portion of long-term debt

478,807

     Total current liabilities

507,446

1,024,135

   Long-term debt, net

1,500,283

1,496,064

   Long-term income taxes payable

68,082

86,227

   Other long-term liabilities

129,381

138,609

     Total liabilities

2,205,192

2,745,035

   Stockholders’ equity (deficit)

20,162

(80,766)

     Total liabilities and stockholders’ equity (deficit)

$                     2,225,354

$                     2,664,269

 

PLANTRONICS, INC.

SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Twelve Months Ended

April 2,

April 3,

April 2,

April 3,

2022

2021

2022

2021

Cash flows from operating activities

   Net (loss) income

$           (30,893)

$            10,977

$            17,917

$           (57,331)

   Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities

     Depreciation and amortization

36,330

39,986

149,126

164,867

     Amortization of debt issuance cost

1,055

2,465

6,101

6,427

     Stock-based compensation

13,946

11,540

48,160

42,644

     Deferred income taxes

(6,038)

(5,801)

(121,698)

(21,174)

     Provision for excess and obsolete inventories

5,301

760

13,461

13,527

     Restructuring and other related charges

960

(773)

34,937

48,704

     Cash payments for restructuring charges

(4,178)

(4,970)

(31,693)

(33,764)

     Other operating activities

(913)

(2,862)

2,944

916

   Changes in assets and liabilities

     Accounts receivable, net

(2,801)

47,186

(11,370)

(24,253)

     Inventory, net

(20,792)

(2,053)

(45,491)

(41,994)

     Current and other assets

1,630

(4,537)

(11,783)

(22,487)

     Accounts payable

8,625

(16,001)

17,795

46,453

     Accrued liabilities

(1,192)

(2,054)

(47,793)

38,402

     Income taxes

(8,757)

168

(28,382)

(15,757)

       Net cash (used in) provided by operating activities

(7,717)

74,031

(7,769)

145,180

Cash flows from investing activities

   Proceeds from sales of short-term investments

2,507

1,862

2,771

2,529

   Purchases of short-term investments

(77)

(197)

(837)

(591)

   Capital expenditures

(9,040)

(5,962)

(29,722)

(22,715)

   Proceeds from sale of property, plant, and equipment

1,900

   Other investing activities

(2,020)

(6,020)

     Net cash used in investing activities

(8,630)

(4,297)

(33,808)

(18,877)

Cash flows from financing activities

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

(911)

(2,737)

(13,065)

(5,930)

   Proceeds from issuances under stock-based compensation plans

5,943

6,576

11,784

12,307

   Proceeds from revolving line of credit

50,000

   Repayments of revolving line of credit

(50,000)

   Repayments of long-term debt

(100,000)

(480,689)

(146,980)

   Proceeds from debt issuance, net of issuance costs

493,922

493,922

     Net cash provided by (used in) financing activities

5,032

397,761

(481,970)

353,319

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1,385)

(1,092)

(2,921)

2,967

Net (decrease) increase in cash, cash equivalents, and restricted cash

(12,700)

466,403

(526,468)

482,589

Cash and cash equivalents and restricted cash at beginning of period

182,700

230,065

696,468

213,879

Cash and cash equivalents and restricted cash at end of period

$          170,000

$          696,468

$          170,000

$          696,468

 

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of operating results, including non-GAAP 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. These non-GAAP measures are adjusted from the most directly comparable GAAP measures to exclude certain non-cash transactions and activities that are not reflective of our ongoing core operations, as further described below. We believe the use of each of these non-GAAP measures provides meaningful supplemental information in assessing our operating performance and liquidity across reporting periods on a consistent basis and are used by management in evaluating financial performance and in strategic planning. These non-GAAP measures may differ from those used by other companies and are not intended to be considered in isolation of, or as a substitute for, financial results prepared in accordance with GAAP. Certain prior year amounts have been reclassified for consistency with current year presentation.

Non-GAAP Adjustments
  • Purchase accounting amortization: Represents the amortization of purchased intangible assets recorded in connection with the acquisition of Polycom on July 2, 2018.
  • Deferred revenue purchase accounting: Represents the impact of fair value purchase accounting adjustments related to deferred revenue recorded in connection with the acquisition of Polycom on July 2, 2018. The Company’s deferred revenue primarily relates to Services revenue associated with non-cancelable maintenance support on hardware devices which are typically billed in advance and recognized ratably over the contract term as those services are delivered. This adjustment represents the amount of additional revenue that would have been recognized during the period absent the write-down to fair value required under purchase accounting guidance.
  • Stock compensation expense: Represents the non-cash expense associated with the Company’s grant of stock-based awards to employees and non-employee directors.
  • Acquisition costs: Represents charges incurred in connection with the Merger Agreement with HP, such as advisory, legal and accounting fees.
  • Restructuring and other related charges: Represents costs associated with restructuring plans and reorganization actions aimed at improving the Company’s overall cost structure, realigning resources consistent with its global strategy, and reducing expenses to enable strategic investments in revenue growth. These costs are not reflective of ongoing operations and are primarily associated with reductions in the Company’s workforce, facility related charges due to the closure or consolidation of offices, and other related costs, including legal and advisory services.
  • Deferred compensation mark to market: Represents gains and losses driven by the remeasurement of assets and liabilities associated with the Company’s deferred compensation plans. Gains and losses on plan liabilities are recognized within operating expenses, while the offsetting gains and losses on plan assets are recognized within other non-operating income, net.
  • Loss, net on litigation settlements: The Company may be involved in various litigation, claims and proceedings that result in payments or recoveries from such proceedings. The related gains and losses incurred are excluded as they are not reflective of ongoing operations.
  • Income tax effects: Represents the tax effects of non-GAAP adjustments and other adjustments, depending on the nature of the underlying items. The exclusion of the above-mentioned items eliminates the effect of certain non-recurring and unusual tax items that do not necessarily reflect the Company’s long-term operations. The income tax effects for unusual tax items primarily represents the impact of the discrete tax benefit associated with an IP transfer between wholly-owned subsidiaries, changes in uncertain tax positions, and the full valuation allowance on United States federal and state deferred tax assets.

 

PLANTRONICS, INC.

UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except percentages)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA

Three Months Ended

Twelve Months Ended

April 2,

April 3,

April 2,

April 3,

2022

2021

2022

2021

GAAP Net revenues

$           421,382

$           476,233

$       1,681,144

$       1,727,607

   Deferred revenue purchase accounting

468

1,796

3,689

14,405

Non-GAAP Net revenues

$           421,850

$           478,029

$       1,684,833

$       1,742,012

GAAP Gross profit

$           167,025

$           212,816

$           686,093

$           776,551

   Purchase accounting amortization

16,317

16,239

65,031

68,111

   Deferred revenue purchase accounting

468

1,796

3,689

14,405

   Stock-based compensation

1,567

565

5,092

2,939

Non-GAAP Gross profit

$           185,377

$           231,416

$           759,905

$           862,006

Non-GAAP Gross profit %

43.9 %

48.4 %

45.1 %

49.5 %

GAAP Research, development, and engineering

$             47,463

$             52,963

$           183,553

$           209,290

   Stock-based compensation

(3,119)

(3,045)

(9,478)

(13,785)

Non-GAAP Research, development, and engineering

$             44,344

$             49,918

$           174,075

$           195,505

GAAP Selling, general, and administrative

$           135,422

$           126,487

$           499,839

$           488,378

   Purchase accounting amortization

(11,571)

(14,195)

(48,905)

(56,780)

   Stock-based compensation

(9,260)

(7,931)

(33,590)

(25,926)

   Acquisition costs

(9,530)

(9,530)

   Deferred compensation mark to market

908

(917)

(1,008)

(3,263)

   Other adjustments

315

2,103

689

2,100

Non-GAAP Selling, general, and administrative

$           106,284

$           105,547

$           407,495

$           404,509

 

PLANTRONICS, INC.

UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (CONTINUED)

Three Months Ended

Twelve Months Ended

April 2,

April 3,

April 2,

April 3,

2022

2021

2022

2021

GAAP Operating expenses

$          183,845

$          178,677

$          718,329

$          763,933

   Purchase accounting amortization

(11,571)

(14,195)

(48,905)

(56,780)

   Stock-based compensation

(12,379)

(10,976)

(43,068)

(39,711)

   Acquisition costs

(9,530)

(9,530)

   Restructuring and other related charges

(960)

773

(34,937)

(48,704)

   Deferred compensation mark to market

908

(917)

(1,008)

(3,263)

   Loss, net from litigation settlements

(17,561)

   Other adjustments

315

2,103

689

2,100

Non-GAAP Operating expenses

$          150,628

$          155,465

$          581,570

$          600,014

GAAP Operating (loss) income

$           (16,820)

$            34,139

$           (32,236)

$            12,618

   Purchase accounting amortization

27,888

30,434

113,936

124,891

   Stock-based compensation

13,946

11,541

48,160

42,650

   Acquisition costs

9,530

9,530

   Restructuring and other related charges

960

(773)

34,937

48,704

   Deferred revenue purchase accounting

468

1,796

3,689

14,405

   Deferred compensation mark to market

(908)

917

1,008

3,263

   Loss, net from litigation settlements

17,561

   Other adjustments

(315)

(2,103)

(689)

(2,100)

Non-GAAP Operating income

$            34,749

$            75,951

$          178,335

$          261,992

 

PLANTRONICS, INC.

UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except per share data)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (CONTINUED)

Three Months Ended

Twelve Months Ended

April 2,

April 3,

April 2,

April 3,

2022

2021

2022

2021

GAAP Net (loss) income

$           (30,893)

$            10,977

$            17,917

$           (57,331)

   Purchase accounting amortization

27,888

30,434

113,936

124,891

   Stock-based compensation

13,946

11,541

48,160

42,650

   Acquisition costs

$               9,530

9,530

   Restructuring and other related charges

960

(773)

34,937

48,704

   Deferred revenue purchase accounting

468

1,796

3,689

14,405

   Deferred compensation mark to market

(24)

(29)

(69)

55

   Loss, net from litigation settlements

17,561

   Other adjustments

(315)

(2,103)

(689)

(2,095)

   Income tax effect of above items

3,569

4,198

2,791

(11,548)

   Income tax effect of unusual tax items

(2,967)

(2,410)

(123,187)

(9,832)

Non-GAAP Net income

$            22,162

$            53,631

$          107,015

$          167,460

GAAP Diluted (loss) earnings per common share

$               (0.72)

$                 0.25

$                 0.41

$               (1.40)

   Purchase accounting amortization

0.63

0.70

2.59

2.98

   Stock-based compensation

0.32

0.27

1.10

1.02

   Acquisition costs

0.22

0.22

   Restructuring and other related charges

0.02

(0.02)

0.80

1.16

   Deferred revenue purchase accounting

0.01

0.04

0.08

0.34

   Loss, net from litigation settlements

0.42

   Deferred compensation mark to market

   Other adjustments

(0.01)

(0.05)

(0.02)

(0.08)

   Income tax effect

0.01

0.04

(2.74)

(0.45)

   Effect of anti-dilutive securities

0.02

Non-GAAP Diluted earnings per common share

$                 0.50

$                 1.23

$                 2.44

$                 3.99

Shares used in diluted (loss) earnings per common share calculation:

   GAAP

42,922

43,498

43,942

41,044

   Non-GAAP

44,070

43,498

43,942

41,973

 

PLANTRONICS, INC.

UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (CONTINUED)

Three Months Ended

Twelve Months Ended

April 3,

July 3,

October 2,

January 1,

April 2,

April 2,

2021

2021

2021

2022

2022

2022

GAAP Net income (loss)

$                 10,977

$                (36,811)

$                 96,785

$                (11,164)

$                (30,893)

$                 17,917

   Income tax benefit

(341)

(4,262)

(102,567)

(9,604)

(3,722)

(120,155)

   Interest expense

24,424

21,782

16,141

15,948

15,840

69,711

   Other non-operating (income) expense, net

(920)

(692)

23

(995)

1,955

291

   Deferred revenue purchase accounting

1,796

1,260

1,054

907

468

3,689

   Stock-based compensation

11,540

10,416

11,573

12,225

13,946

48,160

   Acquisition costs

9,530

9,530

   Restructuring and other related charges

(773)

28,972

2,607

2,398

960

34,937

   Deferred compensation mark to market

917

994

13

910

(908)

1,009

   Other adjustments

(2,103)

(376)

(315)

(691)

   Depreciation and amortization

39,986

39,833

36,292

36,671

36,330

149,126

Adjusted EBITDA

$                 85,503

$                 61,492

$                 61,545

$                 47,296

$                 43,191

$               213,524

 

Cision View original content:https://www.prnewswire.com/news-releases/poly-announces-fourth-quarter-and-full-year-fiscal-2022-financial-results-301556467.html

SOURCE Plantronics, Inc.

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