Attached files
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8-K - FORM 8-K COMPLETION OF ALTEC SALE - PLANTRONICS INC /CA/ | form8-k.htm |
EX-99.1 - EXHIBIT 99-1 PRESS RELEASE - PLANTRONICS INC /CA/ | exhibit99-1.htm |
Exhibit
99.2
On
October 2, 2009, Plantronics, Inc. (“Plantronics” or “the Company”) and certain
of its foreign subsidiaries entered into an Asset Purchase Agreement (the
“Agreement”) with Audio Technologies Acquisition, LLC, a Delaware limited
liability corporation (“the Purchaser”) an affiliate of Prophet Equity, L.P., a
Southlake, Texas based private equity firm, for the sale of certain assets of
Altec Lansing, the Audio Entertainment Group (“AEG”) business segment of the
Company (the “Transaction”), for a purchase price of $18 million in cash,
subject to certain post-closing adjustments. Pursuant to the
Agreement, the Purchaser will acquire substantially all the assets associated
with the AEG business, including customer and vendor contracts, certain
patents and trademarks and other intellectual property, inventory, property,
plant and equipment, and the name Altec Lansing. In addition, the
Purchaser will assume certain liabilities related to
AEG.
On
December 1, 2009, Plantronics entered into a First Amendment to the Asset Purchase Agreement
(the “Amendment”) by and among Altec Lansing, LLC (f/k/a Audio
Technologies Acquisition, LLC), a Delaware limited liability company (“Altec”),
Audio Technologies Acquisition B.V., a private limited liability company
organized under the laws of the Netherlands (“Altec B.V.”), Plantronics and
Plantronics B.V., a private limited liability company organized under the laws
of the Netherlands (“Plantronics BV”) which amends the Agreement, dated as of
October 2, 2009 by and among the Purchaser, Plantronics and Plantronics B.V. (as
amended by the Amendment, the “Purchase Agreement”). Altec and Altec
B.V. are collectively referred to herein as the “Purchasers”. The Purchasers are
affiliates of Prophet Equity, L.P.
The
Amendment (i) extended the termination date of the Purchase Agreement to
December 1, 2009, (ii) reduced the purchase price by $1,800,000 to account for
the change in the estimated value of net assets being delivered at closing
together with the negotiated after-tax value of Altec Lansing's income in
November, (iii) addressed certain employee matters and (iv) made
certain other changes as set forth in the Amendment. Plantronics
and certain of its affiliates completed the sale of Altec Lansing, its AEG
business segment, to the Purchasers on December 1, 2009.
The
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30,
2009 set forth below has been presented after giving effect to the sale of AEG
as if it had occurred on September 30, 2009. The Unaudited Pro Forma
Condensed Consolidated Statements of Operations for the six month period ended
September 30, 2008 and 2009 and the fiscal years ended March 31, 2007, 2008 and
2009, set forth below has been presented after giving effect to the sale of AEG
as if it had occurred on April 1, 2006. The Company will account for the sale of
AEG as a discontinued operation in its consolidated financial statements
effective in the third quarter of fiscal 2010 for all periods
presented.
The
unaudited pro forma consolidated financial information has been provided for
informational purposes and should not be considered indicative of the financial
condition or results of operations that would have been achieved had the
divestiture occurred as of the periods presented. In addition, the unaudited pro
forma financial information does not purport to indicate balance sheet data or
results of operations as of any future date or for any future period. The
unaudited pro forma financial statement information, including the notes
thereto, should be read in conjunction with the historical financial statements
of the Company included in its Annual Report on Form 10-K for the year ended
March 31, 2009 and its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2009.
PLANTRONICS,
INC.
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in
thousands, except per share data)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE
SHEET
|
|||||||||||||
As
of September 30, 2009
|
|||||||||||||
Sale
of Altec
|
|||||||||||||
Historical
|
Lansing
(1)
|
Pro
Forma
|
|||||||||||
ASSETS
|
|||||||||||||
Cash
and cash equivalents
|
$ | 244,170 | $ | 11,075 | a | $ | 255,245 | ||||||
Short-term
investments
|
24,999 | - | 24,999 | ||||||||||
Total
cash, cash equivalents, and
|
|||||||||||||
short-term
investments
|
269,169 | 11,075 | 280,244 | ||||||||||
Accounts
receivable, net
|
103,003 | 4,795 | d | 107,798 | |||||||||
Inventory,
net
|
100,024 | (21,998 | ) | c | 78,026 | ||||||||
Deferred
income taxes
|
12,765 | - | 12,765 | ||||||||||
Other
current assets
|
17,191 | 5,125 | b | 22,316 | |||||||||
Assets
held for sale
|
9,267 | - | 9,267 | ||||||||||
Total
current assets
|
511,419 | (1,003 | ) | 510,416 | |||||||||
Long-term
investments
|
22,015 | - | 22,015 | ||||||||||
Property,
plant and equipment, net
|
71,224 | (828 | ) | c | 70,396 | ||||||||
Intangibles,
net
|
4,067 | - | 4,067 | ||||||||||
Goodwill
|
14,005 | - | 14,005 | ||||||||||
Other
assets
|
10,978 | - | 10,978 | ||||||||||
Total
assets
|
$ | 633,708 | $ | (1,831 | ) | $ | 631,877 | ||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||||||||
Accounts
payable
|
$ | 34,315 | $ | - | $ | 34,315 | |||||||
Accrued
liabilities
|
54,005 | (1,097 | ) | d | 52,908 | ||||||||
Total
current liabilities
|
88,320 | (1,097 | ) | 87,223 | |||||||||
Long-term
income taxes payable
|
14,215 | - | 14,215 | ||||||||||
Other
long-term liabilities
|
991 | - | 991 | ||||||||||
Total
liabilities
|
103,526 | (1,097 | ) | 102,429 | |||||||||
Stockholders'
equity
|
530,182 | (734 | ) | e | 529,448 | ||||||||
Total
liabilities and stockholders' equity
|
$ | 633,708 | $ | (1,831 | ) | $ | 631,877 | ||||||
|
NOTES
TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(1) | Effective December 1, 2009, Plantronics and certain of its affiliates completed the sale of Altec Lansing, its Audio Entertainment Group ("AEG") business segment. The adjustments presented represent the removal of the book value of assets and liabilities based on their carrying amounts at September 30, 2009 that would transfer as part of the sale. The value of the assets and liabilities that will actually transfer upon the sale will differ from the amounts presented. | |
The pro forma adjustments are as follows: | ||
a. |
To record
the cash consideration received from the Purchaser.
|
|
b. | To record the escrow amounts due from the Purchaser at future dates. | |
c. | To eliminate the assets sold to Purchaser. | |
d. | To eliminate the liabilities assumed by Purchaser, including sales-related reserves assumed by the Purchaser. | |
e. | Solely for purposes of the pro-forma balance sheet, to record the preliminary loss on the sale of AEG as if the transaction had been consummated on September 30, 2009 applying the actual purchase price to the net assets as of September 30, 2009. The loss calculation is preliminary and will change upon the finalization of Plantronics' financial statements for the quarter ended December 31, 2009, including the completion of the income tax accounting associated with the sale. Plantronics expects to record a pre-tax loss of approximately $0.7 million calculated as follows: |
Proceeds
from sale
|
$ | 16,200 | |||
Assets
sold
|
(22,826 | ) | |||
Liabilities
assumed, including sales related reserves
|
5,892 | ||||
Pro
forma estimated loss on sale
|
$ | (734 | ) |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||||||||||||
Six
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||||
September
30, 2008
|
September
30, 2009
|
|||||||||||||||||||||||||
Sale
of Altec
|
|
Sale
of Altec
|
|
|||||||||||||||||||||||
Historical
|
Lansing
(1)
|
Pro
Forma
|
Historical
|
Lansing
(1)
|
Pro
Forma
|
|||||||||||||||||||||
Net
revenues
|
$ | 436,020 | $ | (42,144 | ) | $ | 393,876 | $ | 327,540 | $ | (41,920 | ) | $ | 285,620 | ||||||||||||
Cost
of revenues
|
251,368 | (39,408 | ) | 211,960 | 187,298 | (34,613 | ) | 152,685 | ||||||||||||||||||
Gross
profit
|
184,652 | (2,736 | ) | 181,916 | 140,242 | (7,307 | ) | 132,935 | ||||||||||||||||||
Research,
development and engineering
|
38,545 | (4,469 | ) | 34,076 | 30,258 | (3,047 | ) | 27,211 | ||||||||||||||||||
Selling,
general and administrative
|
96,143 | (10,835 | ) | 85,308 | 74,921 | (8,824 | ) | 66,097 | ||||||||||||||||||
Restructuring
and other related charges
|
235 | (235 | ) | - | 1,454 | (19 | ) | 1,435 | ||||||||||||||||||
Impairment
of long-lived assets
|
- | - | - | 25,194 | (25,194 | ) | - | |||||||||||||||||||
Total
operating expenses
|
134,923 | (15,539 | ) | 119,384 | 131,827 | (37,084 | ) | 94,743 | ||||||||||||||||||
Operating
income
|
49,729 | 12,803 | 62,532 | 8,415 | 29,777 | 38,192 | ||||||||||||||||||||
Interest
and other income (expense), net
|
(1,630 | ) | - | (1,630 | ) | 2,231 | - | 2,231 | ||||||||||||||||||
Income before
income taxes
|
48,099 | 12,803 | 60,902 | 10,646 | 29,777 | 40,423 | ||||||||||||||||||||
Income
tax expense
|
9,957 | 4,845 | (3) | 14,802 | 742 | 11,280 | (3) | 12,022 | ||||||||||||||||||
Net
income
|
$ | 38,142 | $ | 7,958 | $ | 46,100 | $ | 9,904 | $ | 18,497 | $ | 28,401 | ||||||||||||||
Earnings per
common share:
|
||||||||||||||||||||||||||
Basic
|
$ | 0.78 | $ | 0.16 | $ | 0.95 | $ | 0.20 | $ | 0.38 | $ | 0.58 | ||||||||||||||
Diluted
|
$ | 0.77 | $ | 0.16 | $ | 0.93 | $ | 0.20 | $ | 0.38 | $ | 0.58 | ||||||||||||||
Shares
used in computing earnings per share:
|
||||||||||||||||||||||||||
Basic
|
48,738 | 48,738 | 48,738 | 48,632 | 48,632 | 48,632 | ||||||||||||||||||||
Diluted
|
49,362 | 49,362 | 49,362 | 49,118 | 49,118 | 49,118 | ||||||||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||||||||
(in
thousands, except per share data)
|
|||||||||||||
Year
Ended
|
|||||||||||||
March
31, 2009
|
|||||||||||||
Sale
of Altec
|
|||||||||||||
Historical
|
Lansing
(1)
|
Pro
Forma
|
|||||||||||
Net
revenues
|
$ | 765,619 | $ | (91,029 | ) | $ | 674,590 | ||||||
Cost
of revenues
|
469,591 | (86,932 | ) | 382,659 | |||||||||
Gross
profit
|
296,028 | (4,097 | ) | 291,931 | |||||||||
Research,
development and engineering
|
72,061 | (8,221 | ) | 63,840 | |||||||||
Selling,
general and administrative
|
175,601 | (19,923 | ) | 155,678 | |||||||||
Restructuring
and other related charges
|
12,074 | (1,122 | ) | 10,952 | |||||||||
Impairment
of goodwill and long-lived assets
|
117,464 | (117,464 | ) | - | |||||||||
Total
operating expenses
|
377,200 | (146,730 | ) | 230,470 | |||||||||
Operating
income (loss)
|
(81,172 | ) | 142,633 | 61,461 | |||||||||
Interest
and other income (expense), net
|
(3,544 | ) | - | (3,544 | ) | ||||||||
Income
(loss) before income taxes
|
(84,716 | ) | 142,633 | 57,917 | |||||||||
Income
tax expense (benefit)
|
(19,817 | ) | 33,094 | (3) | 13,277 | ||||||||
Net
income (loss)
|
$ | (64,899 | ) | $ | 109,539 | $ | 44,640 | ||||||
Earnings
(loss) per common share:
|
|||||||||||||
Basic
|
$ | (1.34 | ) | $ | 2.25 | $ | 0.92 | ||||||
Diluted
|
$ | (1.34 | ) | $ | 2.25 | $ | 0.91 | ||||||
Shares
used in computing earnings (loss) per share:
|
|||||||||||||
Basic
|
48,589 | 48,589 | 48,589 | ||||||||||
Diluted
|
48,589 | 48,589 | 48,947 | (2) | |||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||||||||
(in
thousands, except per share data)
|
|||||||||||||
Year
Ended
|
|||||||||||||
March
31, 2008
|
|||||||||||||
Sale
of Altec
|
|||||||||||||
Historical
|
Lansing
(1)
|
Pro
Forma
|
|||||||||||
Net
revenues
|
$ | 856,286 | $ | (108,351 | ) | $ | 747,935 | ||||||
Cost
of revenues
|
507,181 | (103,318 | ) | 403,863 | |||||||||
Gross
profit
|
349,105 | (5,033 | ) | 344,072 | |||||||||
Research,
development and engineering
|
76,982 | (11,249 | ) | 65,733 | |||||||||
Selling,
general and administrative
|
189,156 | (25,983 | ) | 163,173 | |||||||||
Restructuring
and other related charges
|
3,584 | (3,584 | ) | - | |||||||||
Total
operating expenses
|
269,722 | (40,816 | ) | 228,906 | |||||||||
Operating
income
|
79,383 | 35,783 | 115,166 | ||||||||||
Interest
and other income, net
|
5,854 | - | 5,854 | ||||||||||
Income
before income taxes
|
85,237 | 35,783 | 121,020 | ||||||||||
Income
tax expense
|
16,842 | 12,573 | (3) | 29,415 | |||||||||
Net
income
|
$ | 68,395 | $ | 23,210 | $ | 91,605 | |||||||
Earnings
per common share:
|
|||||||||||||
Basic
|
$ | 1.42 | $ | 0.48 | $ | 1.90 | |||||||
Diluted
|
$ | 1.39 | $ | 0.47 | $ | 1.87 | |||||||
Shares
used in computing earnings per share:
|
|||||||||||||
Basic
|
48,232 | 48,232 | 48,232 | ||||||||||
Diluted
|
49,090 | 49,090 | 49,090 | ||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||||||||
(in
thousands, except per share data)
|
|||||||||||||
Year
Ended
|
|||||||||||||
March
31, 2007
|
|||||||||||||
Sale
of Altec
|
|||||||||||||
Historical
|
Lansing
(1)
|
Pro
Forma
|
|||||||||||
Net
revenues
|
$ | 800,154 | $ | (123,640 | ) | $ | 676,514 | ||||||
Cost
of revenues
|
491,339 | (110,305 | ) | 381,034 | |||||||||
Gross
profit
|
308,815 | (13,335 | ) | 295,480 | |||||||||
Research,
development and engineering
|
71,895 | (10,312 | ) | 61,583 | |||||||||
Selling,
general and administrative
|
182,108 | (30,251 | ) | 151,857 | |||||||||
Gain
on sale of land
|
(2,637 | ) | - | (2,637 | ) | ||||||||
Total
operating expenses
|
251,366 | (40,563 | ) | 210,803 | |||||||||
Operating
income
|
57,449 | 27,228 | 84,677 | ||||||||||
Interest
and other income, net
|
4,089 | - | 4,089 | ||||||||||
Income
before income taxes
|
61,538 | 27,228 | 88,766 | ||||||||||
Income
tax expense
|
11,395 | 10,314 | (3) | 21,709 | |||||||||
Net
income
|
$ | 50,143 | $ | 16,914 | $ | 67,057 | |||||||
Earnings per
common share:
|
|||||||||||||
Basic
|
$ | 1.06 | $ | 0.36 | $ | 1.42 | |||||||
Diluted
|
$ | 1.04 | $ | 0.35 | $ | 1.40 | |||||||
Shares
used in computing earnings per share:
|
|||||||||||||
Basic
|
47,361 | 47,361 | 47,361 | ||||||||||
Diluted
|
48,020 | 48,020 | 48,020 | ||||||||||
NOTES
TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(1) | These adjustments reflect the elimination of the historical operations of Altec Lansing, the Audio Entertainment Group (“AEG”) business segment of the Company for the six months ended September 30, 2008 and 2009 and the fiscal years ended March 31, 2007, 2008 and 2009. The Company's fiscal year ends on the Saturday closest to the last day of March. For purposes of presentation, the Company has indicated its accounting year as ending on March 31. Effective as of December 1, 2009, the sale of AEG was completed. The Company will account for the sale of AEG as a discontinued operation in its consolidated financial statements effective in the third quarter of fiscal 2010 for all periods presented. |
(2) | As the Company incurred a GAAP net loss for the year ended March 31, 2009, the inclusion of stock options in the shares used for computing diluted earnings per share would have been anti-dilutive and would have reduced the net loss per share. However, as we have pro forma net income, the diluted shares used for the pro forma diluted earnings per share includes the effect of stock options. |
(3) | Pro forma income tax expense is based on preliminary estimates and subject to change upon completion of the tax accounting related to the discontinued operations. |