COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Jul. 02, 2022 | Aug. 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 02, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-12696 | |
Entity Registrant Name | Plantronics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0207692 | |
Entity Address, Address Line One | 345 Encinal Street | |
Entity Address, City or Town | Santa Cruz | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95060 | |
City Area Code | 831 | |
Local Phone Number | 420-3002 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | POLY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,993,852 | |
Entity Central Index Key | 0000914025 | |
Current Fiscal Year End Date | --04-01 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Current assets | ||
Cash and cash equivalents | $ 142,362 | $ 170,000 |
Short-term investments | 11,908 | 13,703 |
Accounts receivable, net | 274,939 | 277,924 |
Inventory, net | 245,189 | 234,102 |
Other current assets | 90,918 | 83,410 |
Total current assets | 765,316 | 779,139 |
Property, plant, and equipment, net | 124,052 | 127,021 |
Purchased intangibles, net | 202,437 | 230,478 |
Goodwill | 796,216 | 796,216 |
Deferred tax assets | 214,229 | 215,861 |
Other non-current assets | 68,449 | 76,639 |
Total assets | 2,170,699 | 2,225,354 |
Current liabilities | ||
Accounts payable | 173,252 | 168,610 |
Accrued liabilities | 317,219 | 338,836 |
Total current liabilities | 490,471 | 507,446 |
Long-term debt, net | 1,501,337 | 1,500,283 |
Long-term income taxes payable | 66,770 | 68,082 |
Other non-current liabilities | 118,515 | 129,381 |
Total liabilities | 2,177,093 | 2,205,192 |
Commitments and contingencies (Note 6) | ||
Stockholders' (deficit) equity | ||
Common stock | 940 | 930 |
Additional paid-in capital | 1,630,792 | 1,616,198 |
Accumulated other comprehensive income | 39,081 | 32,911 |
Accumulated deficit | (780,403) | (747,316) |
Total stockholders' equity before treasury stock | 890,410 | 902,723 |
Less: Treasury stock, at cost | (896,804) | (882,561) |
Total stockholders' (deficit) equity | (6,394) | 20,162 |
Total liabilities and stockholders' (deficit) equity | $ 2,170,699 | $ 2,225,354 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Net revenues | $ 415,559 | $ 431,172 |
Cost of revenues | 247,518 | 255,983 |
Gross profit | 168,041 | 175,189 |
Operating expenses | ||
Research, development, and engineering | 51,269 | 45,466 |
Selling, general, and administrative | 131,903 | 120,734 |
Restructuring and other related charges | (49) | 28,972 |
Total operating expenses | 183,123 | 195,172 |
Operating loss | (15,082) | (19,983) |
Interest expense | 16,121 | 21,782 |
Other non-operating expense (income), net | 2,922 | (692) |
Loss before income taxes | (34,125) | (41,073) |
Income tax benefit | (1,038) | (4,262) |
Net loss | $ (33,087) | $ (36,811) |
Per share data | ||
Basic (in dollars per share) | $ (0.76) | $ (0.88) |
Diluted (in dollars per share) | $ (0.76) | $ (0.88) |
Basic (in shares) | 43,428 | 42,061 |
Diluted (in shares) | 43,428 | 42,061 |
Product | ||
Net revenues | $ 364,208 | $ 371,203 |
Cost of revenues | 231,677 | 235,196 |
Service | ||
Net revenues | 51,351 | 59,969 |
Cost of revenues | $ 15,841 | $ 20,787 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (33,087) | $ (36,811) |
Unrealized gains (losses) on cash flow hedges | ||
Unrealized cash flow hedge gains | 10,094 | 440 |
Net (gains) losses reclassified into net revenues | (3,365) | 1,772 |
Net gains reclassified into cost of revenues | (446) | (236) |
Net losses reclassified into interest expense | 622 | 3,089 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | 6,905 | 5,065 |
Income tax expense in other comprehensive income | (735) | (243) |
Other comprehensive income | 6,170 | 4,822 |
Comprehensive loss | $ (26,917) | $ (31,989) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (33,087) | $ (36,811) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities | ||
Depreciation and amortization | 36,577 | 39,833 |
Amortization of debt issuance costs | 1,054 | 2,937 |
Stock-based compensation | 14,594 | 10,416 |
Deferred income taxes | 1,243 | (5,943) |
Provision for excess and obsolete inventories | 1,027 | 5,310 |
Restructuring and other related charges | (49) | 28,972 |
Cash payments for restructuring charges | (2,859) | (12,230) |
Other operating activities | 1,323 | 920 |
Changes in assets and liabilities | ||
Accounts receivable, net | 2,763 | (3,758) |
Inventory, net | (11,913) | 6,326 |
Current and other assets | 9,961 | (3,919) |
Accounts payable | 6,158 | 12,515 |
Accrued liabilities | (22,962) | (40,265) |
Income taxes | (6,811) | (3,454) |
Net cash (used in) provided by operating activities | (2,981) | 849 |
Cash flows from investing activities | ||
Purchases of short-term investments | (65) | (404) |
Capital expenditures | (7,132) | (6,052) |
Other investing activities | 0 | (4,000) |
Net cash used in investing activities | (7,197) | (10,456) |
Cash flows from financing activities | ||
Employees' tax withheld and paid for restricted stock and restricted stock units | (14,243) | (10,225) |
Proceeds from issuances under stock-based compensation plans | 10 | 9 |
Repayments of long-term debt | 0 | (480,689) |
Net cash used in financing activities | (14,233) | (490,905) |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (3,227) | 805 |
Net decrease in cash and cash equivalents and restricted cash | (27,638) | (499,707) |
Cash and cash equivalents and restricted cash at beginning of period | 170,000 | 696,468 |
Cash and cash equivalents and restricted cash at end of period | $ 142,362 | $ 196,761 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock |
Beginning balance (in shares) at Apr. 03, 2021 | 41,751 | |||||
Stockholders' equity, beginning balance at Apr. 03, 2021 | $ (80,766) | $ 912 | $ 1,556,272 | $ (3,221) | $ (765,233) | $ (869,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (36,811) | (36,811) | ||||
Net unrealized gains on cash flow hedges, net of tax | 4,823 | 4,823 | ||||
Proceeds from issuances under stock-based compensation plans (in shares) | 569 | |||||
Proceeds from issuances under stock-based compensation plans | 9 | $ 9 | ||||
Stock-based compensation | 10,416 | 10,416 | ||||
Employees' tax withheld and paid for restricted stock and restricted stock units (in shares) | 0 | |||||
Employees' tax withheld and paid for restricted stock and restricted stock units | (10,225) | (10,225) | ||||
Ending balance (in shares) at Jul. 03, 2021 | 42,320 | |||||
Stockholders' equity, ending balance at Jul. 03, 2021 | (112,554) | $ 921 | 1,566,688 | 1,602 | (802,044) | (879,721) |
Beginning balance (in shares) at Apr. 02, 2022 | 43,073 | |||||
Stockholders' equity, beginning balance at Apr. 02, 2022 | 20,162 | $ 930 | 1,616,198 | 32,911 | (747,316) | (882,561) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (33,087) | (33,087) | ||||
Net unrealized gains on cash flow hedges, net of tax | 6,170 | 6,170 | ||||
Proceeds from issuances under stock-based compensation plans (in shares) | 651 | |||||
Proceeds from issuances under stock-based compensation plans | 10 | $ 10 | ||||
Stock-based compensation | 14,594 | 14,594 | ||||
Employees' tax withheld and paid for restricted stock and restricted stock units (in shares) | 0 | |||||
Employees' tax withheld and paid for restricted stock and restricted stock units | $ (14,243) | (14,243) | ||||
Ending balance (in shares) at Jul. 02, 2022 | 43,724 | |||||
Stockholders' equity, ending balance at Jul. 02, 2022 | $ (6,394) | $ 940 | $ 1,630,792 | $ 39,081 | $ (780,403) | $ (896,804) |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 3 Months Ended |
Jul. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BACKGROUND AND BASIS OF PRESENTATION | BACKGROUND AND BASIS OF PRESENTATION Plantronics, Inc. (“Poly,” the “Company”) is a leading global communications company that designs, manufactures, and markets integrated communications and collaboration solutions for professionals. The Company has two operating and reportable segments, Products and Services, and offers its products under the , Plantronics and Polycom brands. Acquisition by HP Inc. On March 25, 2022, Poly entered into an Agreement and Plan of Merger (the “Merger Agreement”) with HP Inc. (“HP”) and Prism Subsidiary Corp. (“Merger Sub”), a wholly owned subsidiary of HP, providing for Poly’s acquisition in an all-cash transaction for $40.00 per share of Poly's common stock by way of a merger of Merger Sub with and into Poly (the “Merger”), with Poly continuing as a wholly owned subsidiary of HP. The Merger Agreement and transactions contemplated by the Merger Agreement were approved by Poly's Board of Directors (the “Board”). On June 23, 2022, Poly stockholders voted to adopt the Merger Agreement. The Merger is expected to close, subject to receipt of required regulatory clearances and the satisfaction of other customary closing conditions, in calendar year 2022. Under the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of Poly’s common stock (except as otherwise set forth in the Merger Agreement) will be canceled and automatically converted into the right to receive $40.00 in cash, without interest and less any applicable withholding taxes. Upon consummation of the Merger, Poly’s common stock will no longer be listed on any public market. The descriptions of the Merger Agreement and the transactions contemplated thereby contained in this Quarterly Report are summaries only and are qualified in their entirety by reference to the full text of the Merger Agreement, which is attached as Annex A to the definitive proxy statement on Schedule 14A filed by Poly with the SEC on May 17, 2022, as amended. Basis of Presentation The Company's unaudited condensed consolidated financial statements and accompanying notes are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and contain all necessary adjustments, which are normal and recurring in nature, necessary to provide a fair financial statement presentation for the periods presented. The condensed consolidated balance sheet for April 2, 2022 was derived from audited financial statements. The financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated. The unaudited condensed consolidated financial statements and accompanying notes should be reviewed in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended April 2, 2022, filed with the Securities and Exchange Commission (“SEC”) on May 27, 2022. The Company’s fiscal year ends on the Saturday closest to the last day of March. The Company’s current and prior fiscal years end on April 1, 2023 and April 2, 2022, respectively, and both consist of 52 weeks. The three months ended July 2, 2022 and July 3, 2021 both consist of 13 weeks. Reclassifications Certain prior year amounts have been reclassified for consistency with current year presentation. Each of the reclassifications was immaterial and had no effect on the Company's results of operations or cash flows. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Jul. 02, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting pronouncements issued by the Financial Accounting Standards Board ( “ FASB ” ) did not and are not expected to have a material impact on the Company's financial position, results of operations, or cash flows. |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 3 Months Ended |
Jul. 02, 2022 | |
Compensation Related Costs [Abstract] | |
DEFERRED COMPENSATION | DEFERRED COMPENSATION The Company holds investments in mutual funds comprised of publicly traded debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans. These investments are recorded at fair value and classified as short-term investments in its condensed consolidated balance sheets. The corresponding deferred compensation plan liability is recorded in accrued liabilities and other non-current liabilities in its condensed consolidated balance sheets. As of July 2, 2022 and April 2, 2022, the fair value of these investments were $11.9 million and $13.7 million, respectively. As of July 2, 2022 and April 2, 2022, the related deferred compensation plan liability was $11.9 million and $13.7 million, respectively. |
DETAILS OF CERTAIN BALANCE SHEE
DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS | 3 Months Ended |
Jul. 02, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS | DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS Accounts receivable, net (in thousands) July 2, 2022 April 2, 2022 Accounts receivable $ 359,643 $ 381,744 Provisions for promotions and rebates (84,190) (102,499) Provisions for doubtful accounts and sales allowances (514) (1,321) Accounts receivable, net $ 274,939 $ 277,924 Inventory, net (in thousands) July 2, 2022 April 2, 2022 Raw materials $ 94,943 $ 90,192 Work in process 1,164 1,656 Finished goods 149,082 142,254 Inventory, net $ 245,189 $ 234,102 Accrued Liabilities (in thousands) July 2, 2022 April 2, 2022 Short-term deferred revenue $ 122,412 $ 128,339 Employee compensation and benefits 67,804 69,011 Provision for returns 17,520 17,672 Accrued other 109,483 123,814 Accrued liabilities $ 317,219 $ 338,836 The Company's warranty obligation is recorded in accrued liabilities and other non-current liabilities in the condensed consolidated balance sheets. Changes in the warranty obligation during the three months ended July 2, 2022 and July 3, 2021 were as follows: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Warranty obligation at beginning of period $ 18,711 $ 17,384 Warranty provision related to products shipped 4,733 4,157 Deductions for warranty claims processed (6,494) (6,800) Adjustments related to preexisting warranties 1,848 3,603 Warranty obligation at end of period $ 18,798 $ 18,344 |
PURCHASED INTANGIBLE ASSETS
PURCHASED INTANGIBLE ASSETS | 3 Months Ended |
Jul. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PURCHASED INTANGIBLE ASSETS | PURCHASED INTANGIBLE ASSETS As of July 2, 2022 and April 2, 2022, the carrying value of purchased intangible assets is as follows: July 2, 2022 April 2, 2022 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets Existing technology $ 429,923 $ (358,575) $ 71,348 1.1 years $ 429,923 $ (342,103) $ 87,820 Customer relationships 240,024 (173,157) 66,867 2.0 years 240,024 (164,799) 75,225 Trade name/Trademarks 115,600 (51,378) 64,222 5.0 years 115,600 (48,167) 67,433 Total intangible assets $ 785,547 $ (583,110) $ 202,437 2.6 years $ 785,547 $ (555,069) $ 230,478 During the three months ended July 2, 2022 and July 3, 2021, the Company recognized amortization expense of $28.0 million and $30.4 million, respectively. Future amortization expense attributable to purchased intangible assets as of July 2, 2022 was as follows: (in thousands) Amount 2023 (remaining nine months) 84,124 2024 66,869 2025 22,544 2026 12,844 2027 12,844 Thereafter 3,212 Total $ 202,437 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jul. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Future Minimum Lease Payments Future minimum lease payments under non-cancelable operating leases as of July 2, 2022 were as follows: (in thousands) Operating Leases (1) 2023 (remaining nine months) $ 9,983 2024 12,485 2025 9,166 2026 7,956 2027 6,344 Thereafter 10,802 Total lease payments 56,736 Less: Imputed interest (2) (6,167) Present value of lease liabilities $ 50,569 (1) The weighted average remaining lease term was 4.9 years as of July 2, 2022. (2) The weighted average discount rate was 4.5% as of July 2, 2022. Unconditional Purchase Obligations The Company's off-balance sheet unconditional purchase obligations are comprised of third-party manufacturing, component purchases, and other general and administrative commitments. We use several contract manufacturers to manufacture raw materials, components, and subassemblies for our products through our supply and demand information that can cover periods up to 78 weeks. The contract manufacturers use this information to acquire components and build products. We also obtain individual components for our products from a wide variety of individual suppliers using a combination of purchase orders, supplier contracts, including annual minimum purchase obligations, and open orders based on projected demand information. A substantial portion of the raw materials, components, and subassemblies used in our products are provided by our suppliers on a consignment basis. These consigned inventories are not recorded on our consolidated balance sheets until we take title to the raw materials, components, and subassemblies, which occurs when they are consumed in the production process. Prior to consumption in the production process, our suppliers bear the risk of loss and retain title to the consigned inventory. The agreements allow us to return parts in excess of maximum order quantities to the suppliers at the supplier’s expense. Returns for other reasons are negotiated with the suppliers on a case-by-case basis and to date have been immaterial. If our suppliers were to discontinue financing consigned inventory, it would require us to make cash outlays and we could incur expenses which, if material, could negatively affect our business and financial results. As of July 2, 2022, the Company had outstanding off-balance sheet unconditional purchase obligations of $687.6 million, including third-party manufacturing and component purchases of $557.0 million net of consigned inventories of $77.4 million. We expect to consume unconditional purchase obligations in the normal course of business, net of an immaterial purchase commitments reserve. In certain instances, these agreements allow us the option to cancel, reschedule, and adjust our requirements based on our business needs in partnering with our suppliers given the current environment. Other Guarantees and Obligations In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, purchasers of assets or subsidiaries and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of agreements or representations and warranties made by the Company, services to be provided by the Company, intellectual property infringement claims made by third parties or, with respect to the sale of assets of a subsidiary, matters related to the Company's conduct of business and tax matters prior to the sale. From time to time, the Company indemnifies customers against combinations of loss, expense, or liability arising from various triggering events relating to the sale and use of its products and services. In addition, the Company also provides indemnification to customers against claims related to undiscovered liabilities, additional product liability, or environmental obligations. The Company has also entered into indemnification agreements with its directors, officers, and certain other personnel that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers of the Company or certain of its affiliated entities. The Company maintains director and officer liability insurance, which may cover certain liabilities arising from its obligation to indemnify its directors, officers, and certain other personnel in certain circumstances. It is not possible to determine the aggregate maximum potential loss under these agreements due to the limited history of prior claims and the unique facts and circumstances involved in each particular claim. Such indemnification obligations might not be subject to maximum loss clauses. Historically, the Company has not incurred material costs as a result of obligations under these agreements and it has not accrued any liabilities related to such indemnification obligations in the condensed consolidated financial statements. As of July 2, 2022, the Company had $28.7 million in off balance-sheet contractual obligations related to advisory services performed in connection with the Merger Agreement which are contingent upon the close of the Merger. Claims and Litigation On January 23, 2018, FullView, Inc. filed a complaint in the United States District Court of the Northern District of California against Polycom, Inc. (“Polycom”) alleging infringement of two patents and thereafter filed a similar complaint in connection with the counterpart patents in Canada. Polycom thereafter filed petitions for inter parties review (“IPR”) of both patents U.S. Patent Trial and Appeal Board (“PTAB”), the results of which were appealed to the Court of Appeals for the Federal Circuit. Litigation in both matters in the United States and Canada, respectively, were stayed pending the results of that appeal. Subsequent to the appeal, FullView initiated arbitration proceedings under a terminated license agreement with Polycom alleging that Polycom had failed to pay certain royalties due under that agreement. The arbitration panel awarded an immaterial amount to FullView. FullView filed a First and Second Amended Complaint and Polycom filed a motion to dismiss. The Court granted Polycom's partial motion to dismiss without prejudice and invalidated one of the patents in suit and granted FullView's motion of validity on the second patent. On June 30, 2022, FullView filed a motion for summary judgment on infringement of the ‘143 patent and the Company filed its opposition in July. These motions currently are tentatively scheduled to be heard by the Court on September 29, 2022. Discovery continues in this matter. On June 21, 2018, directPacket Research Inc. (“directPacket”) filed a complaint alleging patent infringement by Polycom in the United States District Court for the Eastern District of Virginia, Norfolk Division. The Court granted Polycom’s Motion to Transfer Venue to the Northern District of California. Polycom filed petitions for IPR of the asserted patents which were granted by the PTAB. The District Court matter was stayed pending resolution of the IPRs. After oral argument, the PTAB issued final written decisions invalidating two of the asserted patents. The remaining claims of the third patent were unasserted against the Company. directPacket appealed the PTAB decision regarding the '588 patent and Polycom appealed the PTAB's decision on the '978 patent to the United States Court of Appeals for the Federal Circuit. On December 13, 2021, the Court issued an affirmance of the decision regarding the invalidity of all asserted claims of the ‘978 patent. On January 27, 2022, the Court vacated the PTAB’s finding that certain claims of the '588 patent were invalid as obvious and remanded the case for further proceedings at the PTAB. The PTAB agreed with Polycom that additional briefing was needed to decide the issue of invalidity in light of the Federal Circuit’s revised claim construction. The district court case remains stayed pending the PTAB decision. On November 15, 2019, Felice Bassuk, individually and on behalf of others similarly situated, filed a complaint against the Company, its former CEO, Joseph Burton, its CFO, Charles Boynton, and its former CFO, Pamela Strayer, alleging various securities law violations. The Company disputes the allegations. The Court appointed lead plaintiff and lead counsel and renamed the action “In re Plantronics, Inc. Securities Litigation” on February 13, 2020. Plaintiffs filed the amended complaint on June 5, 2020 and the Company filed a Motion to Dismiss the Amended Complaint on August 7, 2020. The hearing scheduled for January 13, 2021 was vacated and on March 29, 2021, the Court issued its order granting the Company’s motion to dismiss, but allowing the Plaintiffs leave to amend their complaint. The Plaintiff filed its second amended complaint on June 22, 2021 and the Company filed its Motion to Dismiss on September 7, 2021. The court is expected to rule based on the briefs without a hearing and the parties are awaiting the court's ruling. On December 17, 2019, Cisco Systems, Inc. (“Cisco”) filed a First Amended Complaint for Trade Secret Misappropriation against Plantronics, Inc. and certain individuals which amends a previously filed complaint against certain other individuals. The Company disputes the allegations. The Company filed a Motion to Dismiss and the Court granted the Motion with leave to amend as to defendants He, Chung and Williams, granted the Motion to Compel Arbitration for defendant Williams and granted in part and denied in part the Motion to Dismiss by defendants Puorro and the Company. Cisco filed an Amended Complaint and the defendants moved to dismiss or strike portions of the Amended Complaint. The Court granted in part and denied in part the Motion to Dismiss. On September 10, 2020, the Company filed a Motion for Protective Order and a Motion to Strike and Challenge the Sufficiency of Cisco’s Trade Secret Disclosure. On December 21, 2020, the Court granted in part and denied in part such Motions. On December 30, 2020, Cisco filed a motion for leave to file a Motion for Reconsideration. On January 11, 2021 the Company filed its opposition. The Court issued its Case Management and Pretrial order setting a settlement conference which occurred on April 1, 2021. During such mediation conference, the parties were unable to reach settlement. The Texas arbitration proceeding between Mr. Williams and Cisco was settled pursuant to an agreement by the parties, and Mr. Williams was dismissed with prejudice from both that proceeding and from the district court action. On August 13, 2021, Mr. He settled with Cisco pursuant to which he will be permanently enjoined and forever prohibited from receiving, using, and/or distributing Cisco Confidential Business Information except in limited circumstances. Discovery is ongoing. On July 22, 2020, Koss Corporation filed a complaint alleging patent infringement by the Company and Polycom in the United States District Court for the Western District of Texas, Waco Division. The Company answered the Complaint on October 1, 2020 disputing the claims. On December 18, 2020, the Company filed a Motion to Transfer Venue to the Northern District of California which was granted on May 20, 2021. On November 1, 2021, the Company filed a Motion to Dismiss the suit with the District Court on the grounds of non-patentable subject matter. The Court will rule based on the briefs without a hearing and the parties are awaiting the Court's ruling. During the months of May through June 2022, seven purported stockholders commenced separate actions against the Company and its directors related to the Merger. Those cases were: Stein v. Plantronics, Inc., et al., Civil Action No. 22-cv-03574, filed in the United States District Court for the Southern District of New York on May 3, 2022; Whitfield v. Plantronics, Inc., et al., Civil Action No. 22-cv-02583, filed in the United States District Court for the Eastern District of New York on May 5, 2022; Vicknair v. Plantronics, Inc., et al., Civil Action No. 1:22-cv-02753, filed in the United States District Court for the Eastern District of New York on May 11, 2022; Justice, II v. Plantronics, Inc., et al., No. 2:22-cv-01861, filed in United States District Court for the Eastern District of Pennsylvania on May 12, 2022; Hansen v. Plantronics, Inc., et al., Civil Action No. 5:22-cv-02989-VKD, filed in the United States District Court for the Northern District of California on May 20, 2022; Nathan v. Plantronics, Inc., et al., Civil Action No. 1:22-cv-04461, filed in the United States District Court for the Southern District of New York on May 31, 2022; and Finger v. Plantronics, Inc., et al., Civil Action No. 1:22-cv-03288, filed in the United States District Court for the Eastern District of New York on June 3, 2022. We refer to the complaints referenced in this paragraph collectively as the “Complaints.” The Complaints asserted claims against all defendants under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder, and against the individual defendants under Section 20(a) of the Exchange Act for alleged “control person” liability, with respect to allegedly false or misleading statements in the Company’s preliminary proxy statement filed on May 2, 2022 and/or the Company’s definitive proxy statement filed on May 17, 2022. The Complaints sought, among other relief (1) to enjoin defendants from consummating the Merger; (2) to rescind the Merger or recover damages, if the Merger is completed; (3) to require the individual defendants to issue a revised proxy statement; (4) declaratory relief; and (5) attorneys’ fees and costs. All of the Complaints were voluntarily dismissed with prejudice in June and July 2022 prior to the consummation of the Merger. In addition to the specific matters discussed above, the Company is involved in various legal proceedings and investigations arising in the normal course of conducting business. Where applicable, in relation to the matters described above, the Company has accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to the Company's financial condition, results of operations, or cash flows. The Company is not able to estimate an amount or range of any reasonably possible loss, including in excess of any amount accrued, because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the variable treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings. However, based upon the Company's historical experience, the resolution of these proceedings is not expected to have a material effect on the Company's financial condition, results of operations or cash flows. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings. |
DEBT
DEBT | 3 Months Ended |
Jul. 02, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of the Company's outstanding debt as of July 2, 2022 and April 2, 2022 was as follows: (in thousands) July 2, 2022 April 2, 2022 4.75% Senior Notes $ 494,925 $ 494,737 Term loan facility 1,006,412 1,005,546 As of July 2, 2022 and April 2, 2022, the net unamortized discount, premium, and debt issuance costs on the Company's outstanding debt were $15.5 million and $16.5 million, respectively. 4.75% Senior Notes On March 4, 2021, the Company issued $500.0 million aggregate principal amount of 4.75% Senior Notes. The 4.75% Senior Notes mature on March 1, 2029 and bear interest at a rate of 4.75% per annum, payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2021. The Company received proceeds of $493.9 million from issuance of the 4.75% Senior Notes, net of issuance costs of $6.1 million, which are presented in the condensed consolidated balance sheets as a reduction to the outstanding amount payable and are being amortized to interest expense using the straight-line method, which approximates the effective interest method for this debt, over the term of the 4.75% Senior Notes. A portion of the proceeds was used to repay the outstanding principal of the 5.50% Senior Notes on May 17, 2021. The Company may redeem all or part of the 4.75% Senior Notes, upon not less than a 15-day or more than a 60-day notice, however, the applicable redemption price will be determined as follows: Redemption Period Requiring Payment of: Redemption Up To 40% Using Cash Proceeds From An Equity Offering (3) Make-Whole (1) Premium (2) Date Specific Price 4.75% Senior Notes Prior to March 1, 2024 On or after March 1, 2024 Prior to March 1, 2024 104.75% (1) If the Company redeems the notes prior to the applicable date, the price is principal plus a make-whole premium, which means, the greater of (i) 1.0% of the principal or (ii) the excess of the present value of the redemption price at March 1, 2024 plus interest through March 1, 2024 over the principal amount. (2) If the Company redeems the notes on or after the applicable date, the price is principal plus a premium which declines over time, as specified in the applicable indenture, together with accrued and unpaid interest. (3) If the Company redeems the notes prior to the applicable date with net cash proceeds of one or more equity offerings, the price is equal to the amount specified above, together with accrued and unpaid interest, subject to a maximum redemption of 40% of the aggregate principal amount of the respective note being redeemed and at least 50% of the aggregate principal amount remains outstanding immediately after any such redemption (unless the notes are redeemed or repurchased substantially concurrently). In addition, upon the occurrence of certain change of control triggering events, the Company may be required to repurchase the 4.75% Senior Notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The 4.75% Senior Notes contain restrictive covenants that, among other things, limit the ability of the Company and its restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments and other restricted payments, transfer and sell assets, create liens, enter into transactions with affiliates, and engage in mergers, consolidations, or sales of assets. On June 27, 2022, in connection with the Merger, HP announced that it commenced (i) an offer to exchange (the “Exchange Offer”) any and all outstanding 4.75% Senior Notes issued by Poly for up to $500,000,000 aggregate principal amount of new notes to be issued by HP and cash and (ii) the related solicitation of consents (the “Consent Solicitation” and, together with the Exchange Offer, the “Exchange Offer and Consent Solicitation”) to adopt the Amendments (as defined below) to the indenture (the “Indenture”) governing the 4.75% Senior Notes. On July 19, 2022, HP announced that the requisite number of consents have been received to adopt the Amendments with respect to all outstanding 4.75% Senior Notes. On July 25, 2022, Poly entered into a supplemental indenture (the “Supplemental Indenture”) to the Indenture implementing the Amendments. The proposed amendments (the “Amendments”) contained in the Supplemental Indenture will amend the Indenture to, among other things, eliminate from the Indenture (i) substantially all of the restrictive covenants, (ii) certain of the events which may lead to an “Event of Default”, (iii) the restrictions on Poly consolidating with or merging into another person or conveying, transferring or leasing all or any of its properties and assets to any person, (iv) the reporting covenant and (v) the obligation to offer to purchase the 4.75% Senior Notes upon certain change of control transactions (including the Merger). The Amendments will only become operative upon the settlement of the Exchange Offer, which is expected to occur promptly after the Expiration Date (as defined in the exchange offer memorandum and consent solicitation statement, dated June 27, 2022 and as amended from time to time) and no earlier than the closing date of the Merger. The foregoing description of the Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference to the Supplemental Indenture, a copy of which is attached as Exhibit 4.1 to the Current Report on Form 8-K filed by Poly with the SEC on July 27, 2022. 5.50% Senior Notes In May 2015, the Company issued $500.0 million aggregate principal amount of 5.50% Senior Notes. The 5.50% Senior Notes mature on May 31, 2023, and bear interest at a rate of 5.50% per annum, payable semi-annually on May 15 and November 15 of each year, commencing on November 15, 2015. The Company received net proceeds of $488.4 million from issuance of the 5.50% Senior Notes, net of issuance costs of $11.6 million, which are being amortized to interest expense over the term of the 5.50% Senior Notes using the straight-line method, which approximates the effective interest method for this debt. A portion of the proceeds was used to repay all then-outstanding amounts under the Company's revolving line of credit agreement with Wells Fargo Bank and the remaining proceeds were used primarily for share repurchases. On May 17, 2021, the Company used a portion of the proceeds from the 4.75% Senior Notes to redeem the outstanding principal and accrued interest of the 5.50% Senior Notes of $493.9 million. Term Loan Facility In connection with the acquisition of Polycom completed on July 2, 2018, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (the “Credit Agreement.”) The Credit Agreement replaced the Company’s prior revolving credit facility in its entirety. The Credit Agreement provides for (i) a revolving credit facility with an initial maximum aggregate amount of availability of $100 million that matures in July 2023 and (ii) a $1.275 billion term loan facility priced at LIBOR plus 2.50% due in quarterly principal installments commencing on the last business day of March, June, September and December beginning with the first full fiscal quarter ending after the closing date under the Credit Agreement for the aggregate principal amount funded on the closing date under the Credit Agreement multiplied by 0.25% (subject to prepayments outlined in the Credit Agreement) and all remaining outstanding principal due at maturity in July 2025. The Company has paid the full amount of term debt principal due prior to maturity. The Company borrowed the full amount available under the term loan facility of $1.245 billion, net of approximately $30 million of discounts and issuance costs which are being amortized to interest expense over the term of the Credit Agreement using the straight-line method, which approximates the effective interest method for this debt. The proceeds from the initial borrowing under the Credit Agreement were used to finance the acquisition of Polycom, to refinance certain debt of Polycom, and to pay related fees, commissions and transaction costs. The Company has additional borrowing capacity under the Credit Agreement through the revolving credit facility, which could be used to provide ongoing working capital and capital for other general corporate purposes of the Company and its subsidiaries. The Company’s obligations under the Credit Agreement are currently guaranteed by Polycom and will from time to time be guaranteed by, subject to certain exceptions, any domestic subsidiaries that may become material in the future. Subject to certain exceptions, the Credit Agreement is secured by first-priority perfected lien on, and security interests in, substantially all of the personal property of the Company and each subsidiary guarantor and will from time to time also be secured by certain material real property that the Company or any subsidiary guarantor may acquire. Borrowings under the Credit Agreement bear interest due on a quarterly basis at a variable rate equal to (i) LIBOR plus a specified margin, or (ii) the base rate (which is the highest of (a) the prime rate publicly announced from time to time by Wells Fargo Bank, National Association, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus a specified margin. The Company must also pay (i) an unused commitment fee ranging from 0.200% to 0.300% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement, and (ii) a per annum fee equal to (a) for each performance standby letter of credit outstanding under the Credit Agreement with respect to non-financial contractual obligations, 50% of the applicable margin over LIBOR under the revolving credit facility in effect from time to time multiplied by the daily amount available to be drawn under such letter of credit, and (b) for each other letter of credit outstanding under the Credit Agreement, the applicable margin over LIBOR under the revolving credit facility in effect from time to time multiplied by the daily amount available to be drawn under such letter of credit. On December 29, 2021, the Company entered into Amendment No. 3 to Credit Agreement (“Amendment No. 3”) by and among the Company, the financial institutions party thereto as lenders, and Wells Fargo Bank, National Association, as administrative agent. Amendment No. 3 amended the Credit Agreement, as previously amended, to (i) increase the maximum Secured Net Leverage Ratio (as defined in the Credit Agreement) permitted to 3.75 to 1.00 as of the end of any fiscal quarter ending during the period beginning on January 2, 2022 through December 31, 2022 and to 3.00 to 1.00 as of the end of any fiscal quarter ending thereafter, except that the maximum Secured Net Leverage Ratio shall be deemed to be 3.00 to 1.00 at all times for purposes of determining pro forma compliance with each Specified Pro Forma Financial Covenant Test (as defined in the Credit Agreement). Additionally, Amendment No. 3 modified the calculation of the Secured Net Leverage Ratio solely for purposes of determining compliance with Section 7.11(a) of the Credit Agreement for any fiscal quarter ending between January 2, 2022 through December 31, 2022 by amending the definition of Consolidated EBITDA to (a) limit the aggregate amount added back pursuant to clause (vii) thereof (relating to certain acquisition expenses) to the greater of $30,000,000 and 10% of Consolidated EBITDA for such Measurement Period (as defined in the Credit Agreement) (calculated before giving effect to any such expenses to be added back pursuant to such clause (vii) for such Measurement Period), (b) limit the aggregate amount added back pursuant to clause (vii) thereof in respect of integration expenses related to the Polycom Acquisition (as defined in the Credit Agreement) to $30,000,000, and (c) limit the aggregate amount added back pursuant to clause (viii) thereof (relating to certain non-recurring or unusual items reducing consolidated net income) to the greater of $30,000,000 and 10% of Consolidated EBITDA for such Measurement Period (calculated before giving effect to any such items to be added back pursuant to such clause (viii) for such Measurement Period). The financial covenants under the Credit Agreement, as amended, are for the benefit of the revolving credit lenders only and do not apply to any other debt of the Company. The Credit Agreement also contains various other restrictions and covenants, some of which have become more stringent over time, including restrictions on our, and certain of our subsidiaries, ability to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions, make investments, and pay dividends and other distributions. The Company has the unilateral ability to terminate the revolving line of credit such that the financial covenants described above are no longer applicable. The Credit Agreement also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the lenders may declare any outstanding obligations under the Credit Agreement to be immediately due and payable; provided, however, that the occurrence of an event of default as a result of a breach of a financial covenant under the Credit Agreement does not constitute a default or event of default with respect to any term facility under the Credit Agreement unless and until the required revolving lenders shall have terminated their revolving commitments and declared all amounts outstanding under the revolving credit facility to be due and payable. In addition, if the Company, any subsidiary guarantor or, with certain exceptions, any other subsidiary becomes the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable. Loans outstanding under the Credit Agreement will bear interest at a rate of 2.00% per annum in excess of the otherwise applicable rate (i) while a payment or bankruptcy event of default exists or (ii) upon the lenders’ request, during the continuance of any other event of default. As of July 2, 2022, the Company was in compliance w ith all financial covenants. The Company may prepay the loans and terminate the commitments under the Credit Agreement at any time without penalty. Additionally, the Company is subject to mandatory debt repayments five business days after the filing of its consolidated financial statements for any annual period in which the Company generates Excess Cash (as defined in the Credit Agreement). In accordance with the terms of the Credit Agreem ent, the Company did not generate Excess Cash during the fiscal year ended April 2, 2022 and therefore is not required to make any debt repayments in the fiscal year ended April 1, 2023. D uring the three months ended July 2, 2022, the Comp any did not prepay any aggregate principal amount of the term loan facility. As of July 2, 2022, the Company had three letters of credit outstanding under the revolving credit facility for a total of $2.4 million . |
RESTRUCTURING AND OTHER RELATED
RESTRUCTURING AND OTHER RELATED CHARGES | 3 Months Ended |
Jul. 02, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER RELATED CHARGES | RESTRUCTURING AND OTHER RELATED CHARGES The Company has committed to actions to reduce expenses to enable strategic investments in revenue growth. These actions include severance benefits related to headcount reductions in the Company's global workforce, facility related charges due to the closure or consolidation of offices, and legal entity rationalization. Restructuring and other related charges recognized in the Company's condensed consolidated statements of operations is as follows: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Severance $ (422) $ 19,301 Facility 151 (472) Other (1) 132 4,103 Total cash charges (139) 22,932 Non-cash charges (2) 90 6,040 Total restructuring and other related charges $ (49) $ 28,972 (1) Other costs primarily represent associated legal and advisory services. (2) Non-cash charges primarily represent accelerated depreciation due to the closure or consolidation of facilities. Changes in the Company's restructuring liabilities during the three months ended July 2, 2022 are as follows: (in thousands) As of April 2, 2022 Accruals (1) Cash Payments As of July 2, 2022 Severance $ 4,502 $ (422) $ (2,244) $ 1,836 Facility 642 151 (490) 303 Other 85 132 (125) 92 Total $ 5,229 $ (139) $ (2,859) $ 2,231 (1) Excludes non-cash charges recorded in restructuring and other related charges in the condensed consolidated statements of operations for the three months ended July 2, 2022. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Jul. 02, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive income, net of tax, are as follows: (in thousands) July 2, 2022 April 2, 2022 Accumulated unrealized gain on cash flow hedges $ 34,466 $ 28,296 Accumulated foreign currency translation adjustments 4,615 4,615 Accumulated other comprehensive income $ 39,081 $ 32,911 |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Jul. 02, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES Foreign Currency Derivatives The Company's foreign currency derivatives consist primarily of foreign currency forward and option contracts. The Company does not purchase derivative financial instruments for speculative trading purposes. The derivatives expose the Company to credit risk to the extent the counterparties may be unable to meet the terms of the derivative instrument. The Company's maximum exposure to loss as a result of credit risk was equal to the carrying value of the Company's derivative assets as of July 2, 2022 and April 2, 2022. The Company seeks to mitigate such risk by limiting its counterparties to large financial institutions. In addition, the Company monitors the potential risk of loss with any one counterparty resulting from this type of credit risk on an ongoing basis. The Company enters into master netting arrangements with counterparties to mitigate credit risk in derivative transactions, when possible. A master netting arrangement may allow each counterparty to net settle amounts owed between the Company and the counterparty as a result of multiple, separate derivative transactions. As of July 2, 2022, the Company had International Swaps and Derivatives Association agreements with five applicable banks and financial institutions which contained netting provisions. The Company has elected to present the fair value of derivative assets and liabilities within the Company's condensed consolidated balance sheets on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. Derivatives not subject to master netting agreements are not eligible for net presentation. As of July 2, 2022 and April 2, 2022, no cash collateral had been received or pledged related to these derivative instruments. Offsetting of Financial Assets/Liabilities under Master Netting Agreements with Derivative Counterparties As of July 2, 2022 Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Liabilities Cash Collateral Received Net Amount of Derivative Assets Derivatives subject to master netting agreements $ 40,032 $ (778) $ — $ 39,254 Derivatives not subject to master netting agreements — — Total $ 40,032 $ 39,254 Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Assets Cash Collateral Received Net Amount of Derivative Liabilities Derivatives subject to master netting agreements $ (778) $ 778 $ — $ — Derivatives not subject to master netting agreements — — Total $ (778) $ — As of April 2, 2022 Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Liabilities Cash Collateral Received Net Amount of Derivative Assets Derivatives subject to master netting agreements $ 31,891 $ (1,800) $ — $ 30,091 Derivatives not subject to master netting agreements — — Total $ 31,891 $ 30,091 Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Assets Cash Collateral Received Net Amount of Derivative Liabilities Derivatives subject to master netting agreements $ (1,800) $ 1,800 $ — $ — Derivatives not subject to master netting agreements — — Total $ (1,800) $ — The gross fair value of the Company's outstanding derivative contracts at July 2, 2022 and April 2, 2022 was as follows: (in thousands) July 2, 2022 April 2, 2022 Derivative assets (1) Non-designated hedges $ 2,314 $ 1,590 Cash flow hedges 9,194 4,688 Interest rate swaps 28,524 25,613 Total derivative assets $ 40,032 $ 31,891 Derivative liabilities (2) Non-designated hedges $ 89 $ 39 Cash flow hedges 496 384 Interest rate swaps 193 1,377 Accrued interest (24) 28 Total derivative liabilities $ 754 $ 1,828 (1) Short-term derivative assets are recorded in other current assets and long-term derivative assets are recorded in other non-current assets on the condensed consolidated balance sheets. As of July 2, 2022 , the portion of derivative assets classified as long-term was $11.6 million. As of April 2, 2022 , the portion of derivative assets classified as long-term was $16.1 million. (2) Short-term derivative liabilities are recorded in accrued liabilities and long-term derivative liabilities are recorded in other non-current liabilities on the condensed consolidated balance sheets. As of July 2, 2022, the portion of derivative liabilities classified as long-term was $0.1 million. As of April 2,2022, the portion of derivative liabilities classified as long-term was $0.1 million. Non-Designated Hedges As of July 2, 2022, the Company had foreign currency forward contracts denominated in Euro ("EUR") and Great Britain Pound Sterling ("GBP.") The Company does not elect to obtain hedge accounting for these forward contracts. These forward contracts hedge against a portion of the Company’s foreign currency-denominated cash balances, accounts receivables, and accounts payables. The following table summarizes the notional value of the Company’s outstanding foreign exchange currency contracts and approximate USD equivalent at July 2, 2022: (in thousands) Local Currency USD Equivalent Position Maturity EUR € 51,900 $ 54,070 Sell EUR 1 month GBP £ 7,200 $ 8,664 Sell GBP 1 month Effect of Non-Designated Derivative Contracts on the Condensed Consolidated Statements of Operations The effect of non-designated derivative contracts on results of operations recognized in other non-operating income, net in the condensed consolidated statements of operations was as follows: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Gain (loss) on foreign exchange contracts $ 6,713 $ (486) Cash Flow Hedges Costless Collars The Company hedges a portion of the forecast ed EUR and GBP denominated revenues with costless collars. On a monthly basis, the Company enters into option contracts with a six The notional value of the Company's outstanding EUR and GBP option and forward contracts at the end of each period was as follows: July 2, 2022 April 2, 2022 (in millions) EUR GBP EUR GBP Option contracts €84.4 £17.3 €72.8 £14.2 Forward contracts €69.4 £13.8 €68.1 £14.1 The Company will reclassify all related amounts in accumulated other comprehensive income into earnings within the next twelve months. Cross-currency Swaps The Company hedges a portion of the forecasted Mexican Peso (“MXN”) denominated expenditures with a cross-currency swap. As of July 2, 2022, and April 2, 2022, the Company had foreign currency swap contracts of approximately MXN 363.0 million an d MXN 572.4 million, respectively. The following table summarizes the notional value of the Company's outstanding MXN currency swaps and approximate USD Equivalent at July 2, 2022: (in thousands) Local Currency USD Equivalent Position Maturity MXN 362,970 $ 17,293 Buy MXN Monthly over a nine month period The Company will reclassify all related amounts in accumulated other comprehensive income into earnings within the next twelve months. Interest Rate Swaps On June 15, 2021, the Company entered into a three-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $680 million and matures on July 31, 2024. The swap involves the receipt of floating-rate interest payments for fixed interest rate payments at a rate of 0.39% over the life of the agreement. Additionally, on July 30, 2018, the Company entered into a four-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $831 million and matures on July 31, 2022. The swap involves the receipt of floating-rate interest payments for fixed interest rate payments at a rate of 2.78% over the life of the agreement. The Company has designated the interest rate swaps as cash flow hedges. The purpose of the interest rate swaps is to hedge against changes in cash flows (interest payments) attributable to fluctuations in the Company's variable rate debt. The swaps are valued based on prevailing LIBOR rate curves on the date of measurement. The Company also evaluates counterparty credit risk when it calculates the fair value of the interest rate swaps. Changes in the fair value of the interest rate swaps are recorded to other comprehensiv e income an d are reclassified to interest expense over the life of the underlying debt as interest is accrued. During the three months ended July 2, 2022, the Company reclassified into interest expense $0.6 million and had a $28.3 million unrealized gain on its interest rate swaps derivatives designated as cash flow hedges. The Company will reclassify approximately $16.9 million in accumulated other comprehensive income into earnings within the next twelve months. Effect of Designated Derivative Contracts on Accumulated Other Comprehensive Income (Loss) and Condensed Consolidated Statements of Operations The following table presents the pre-tax effects of derivative instruments designated as cash flow hedges on accumulated other comprehensive income (loss) and the condensed consolidated statements of operations for the three months ended July 2, 2022 and July 3, 2021: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Loss included in accumulated other comprehensive income (loss), as of beginning of period $ 26,805 $ (10,062) Gain (loss) recognized in other comprehensive income (loss) 10,094 440 Amount of (gain) loss reclassified from accumulated other comprehensive income (loss) into net revenues (3,365) 1,772 Amount of gain reclassified from accumulated other comprehensive income (loss) into cost of revenues (446) (236) Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense 622 3,089 Total amount of (gain) loss reclassified from accumulated other comprehensive income to the condensed consolidated statements of operations (3,189) 4,625 Gain (loss) included in accumulated other comprehensive income (loss), as of end of period $ 33,710 $ (4,997) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jul. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENTS Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. In determining fair value, we use various valuation approaches. The hierarchy of those valuation approaches is in three levels based on the reliability of inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following is a summary of the hierarchy levels: • Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. • Level 3: Inputs are unobservable for the asset or liability. Carrying Value at Fair Value at July 2, 2022 (in thousands) Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 142,362 $ 142,362 $ — $ — Short-term investments 11,908 11,908 — — Derivative instruments 40,032 — 40,032 — Liabilities: Derivative instruments $ 754 $ — $ 754 $ — Long-term debt 1,501,337 — 1,507,708 — Carrying Value at Fair Value at April 2, 2022 (in thousands) Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 170,000 $ 170,000 $ — $ — Short-term investments 13,703 13,703 — — Derivative instruments 31,891 — 31,891 — Liabilities: Derivative instruments $ 1,828 $ — $ 1,828 $ — Long-term debt 1,500,283 — 1,521,562 — Valuation Techniques • Cash and cash equivalents, short-term investments, and restricted cash are classified within Level 1 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets. The types of financial instruments the Company classifies within Level 1 include bank deposits, money market securities, and publicly traded mutual funds. • The Company estimates the fair value of derivatives using pricing models that use observable market inputs. The significant Level 2 inputs used in the valuation of derivatives include spot rates and forward rates. These inputs were obtained from pricing services, broker quotes, and other sources. • The fair value of long-term debt was determined based on inputs that were observable in the market, including the trading price, when available. There w ere no transfers b etween fair value hierarchy levels during the three months ended July 2, 2022 or July 3, 2021. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jul. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company and its subsidiaries are subject to taxation in the U.S. and in various foreign and state jurisdictions. The Company's income tax benefit is determined using an estimated annual effective tax rate, adjusted for discrete items arising during the period. The effective tax rates for the three months ended July 2, 2022 and July 3, 2021 were 3.0% and 10.4%, respectively. Income tax benefit for the three months ended July 2, 2022 and July 3, 2021 was $1.0 million and $4.3 million, respectively . The difference between the effective tax rate and the U.S. federal statutory rate primarily relates to the excess stock tax benefit, U.S. and foreign income mix, and the valuation allowance on the U.S. federal and state deferred tax assets ( “ DTAs ” ) that continues to be maintained as of July 2, 2022. A significant portion of the Company's DTAs relate to the IP transfer between wholly-owned subsidiaries. At this time, based on evidence currently available, the Company considers it more likely than not that it will have sufficient taxable income in the future that will allow the Company to realize the DTAs; however, failure to generate sufficient future taxable income could result in some or all DTAs not being utilized in the future. If the Company is unable to generate sufficient future taxable income, a substantial valuation allowance to reduce the Company's DTAs may be required. The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. Significant judgment is required in evaluating our uncertain tax positions and determining the Company's provision for income taxes. During the three months ended July 2, 2022, the amount of gross unrecognized tax benefits decreased by $1.1 million. As of July 2, 2022, the Company has $14.3 million of unrecognized tax benefits, all of which could result in a reduction of the Company’s effective tax rate if recognized. The reduction in gross unrecognized tax benefits is primarily attributable to the lapse of applicable statute of limitations. In September 2021, we transferred certain non-Americas intellectual property (“IP”) rights between our wholly-owned subsidiaries (“IP transfer”) to align with our evolving business operations, resulting in the derecognition of a deferred tax asset (“DTA”) of $91.1 million and the recognition of a new DTA of $204.5 million, which represents the book and tax basis difference in the IP and was based on the fair value of the IP, in the respective subsidiaries. This results in a net discrete deferred tax benefit of $113.4 million. Management has concluded that an impairment for local statutory and tax reporting to the aforementioned IP exists and the impairment loss is deductible for local tax purposes. As such, a DTA related to net operating loss carryforward of $48.0 million was recognized, offset by a corresponding decrease in the DTA related to the intangible asset by the same amount as of April 2, 2022. Because the IP intangible asset is the result of an intercompany transfer, there is no intangible asset recognized in the consolidated balance sheets. Accordingly, there is no net impact to the Company’s consolidated statements of operations, balance sheet, or cash flows. |
COMPUTATION OF (LOSS) EARNINGS
COMPUTATION OF (LOSS) EARNINGS PER COMMON SHARE | 3 Months Ended |
Jul. 02, 2022 | |
Earnings Per Share [Abstract] | |
COMPUTATION OF (LOSS) EARNINGS PER COMMON SHARE | COMPUTATION OF LOSS PER COMMON SHARE Basic (loss) earnings per share is calculated by dividing net (loss) income by the weighted-average number of common shares outstanding during the period. Diluted (loss) earnings per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options and vesting of restricted stock, if the effect is dilutive, in accordance with the treasury stock method. The potentially dilutive effect of outstanding stock options and restricted stock has been excluded from the computation of diluted loss per share in periods where the Company had a net loss, as their effect is anti-dilutive. The following table sets forth the computation of basic and diluted (loss) earnings per common share for the three months ended July 2, 2022 and July 3, 2021: Three Months Ended (in thousands, except per share data) July 2, 2022 July 3, 2021 Numerator: Net loss $ (33,087) $ (36,811) Denominator: Weighted-average basic shares outstanding 43,428 42,061 Weighted-average diluted shares outstanding 43,428 42,061 Basic and diluted loss per common share $ (0.76) $ (0.88) Diluted loss per common share $ (0.76) $ (0.88) Potentially dilutive securities excluded from diluted loss per common share because their effect is anti-dilutive 175 405 |
REVENUE AND MAJOR CUSTOMERS
REVENUE AND MAJOR CUSTOMERS | 3 Months Ended |
Jul. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND MAJOR CUSTOMERS | REVENUE AND GEOGRAPHIC INFORMATION The Company’s major product categories are Headsets, Voice, Video, and Services. Product revenue is largely comprised of sales of hardware devices, peripherals, and platform software licenses used in communication and collaboration in offices and contact centers, with mobile devices, cordless phones, and computers. Services revenue primarily includes support on hardware devices, professional, hosted and managed services, and solutions to the Company's customers. The following table disaggregates revenues by major product category for the three months ended July 2, 2022 and July 3, 2021: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Net revenues Headsets $ 175,811 $ 172,194 Voice 65,284 61,298 Video 123,113 137,711 Services 51,351 59,969 Total net revenues $ 415,559 $ 431,172 For reporting purposes, revenue is attributed to each geographic region based on the location of the customer. The following table presents total net revenues by geography: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Net product revenues U.S. $ 171,408 $ 175,970 Europe, Middle East, and Africa 107,683 111,460 Asia Pacific 55,729 58,270 Americas, excluding U.S. 29,388 25,503 Total international net product revenues 192,800 195,233 Total net product revenues $ 364,208 $ 371,203 Net service revenues U.S. $ 21,040 $ 22,758 Europe, Middle East, and Africa 12,307 14,661 Asia Pacific 14,701 18,488 Americas, excluding U.S. 3,303 4,062 Total international net service revenues 30,311 37,211 Total net service revenues $ 51,351 $ 59,969 Total net revenues $ 415,559 $ 431,172 The Company's deferred revenue represents the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of period end and is comprised of non-cancelable maintenance support performance obligations on hardware devices which are typically billed in advance and recognized ratably over the contract term as the services are delivered. As of July 2, 2022 and April 2, 2022, the Company's deferred revenue balance was $183.6 million and $193.1 million, respectively, of which $122.4 million and $64.7 million, respectively, was classified as current. During the three months ended July 2, 2022, the Company recognized $42.9 million in total net revenues that were recorded in deferred revenue at the beginning of the period. Upon establishment of creditworthiness, the Company may extend credit terms to its customers which typically ranges between 30 and 90 days from the date of invoice depending on geographic region and type of customer. The Company typically bills upon product hardware shipment, at time of software activation, upon the start of service entitlement, or upon completion of services. The balance of contract assets was $3.5 million and $4.3 million as of July 2, 2022 and April 2, 2022, respectively. None of the Company's contracts are deemed to have significant financing components. For certain arrangements, the Company pays commissions, bonuses and taxes associated with obtaining the contracts. The Company capitalizes such costs if they are deemed to be incremental and recoverable. The capitalized amount of incremental and recoverable costs of obtaining contracts and related amortization was not material as of and for the three months ended July 2, 2022. |
SEGMENT REPORTING AND GEOGRAPHI
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION | 3 Months Ended |
Jul. 02, 2022 | |
Segments, Geographical Areas [Abstract] | |
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION | SEGMENT REPORTING The Company's Chief Executive Officer is identified as its Chief Operating Decision Maker (“CODM.”) The CODM has organized the Company, manages resource allocations, and measures performance among its two operating segments: Products and Services. The Products reportable segment includes the Headsets, Voice and Video product lines. The Services reportable segment includes maintenance support on hardware devices as well as professional, managed and cloud services and solutions. In managing the two operating segments the CODM uses information about their revenue and gross margin after adjustments to exclude certain non-cash transactions and activities that are not reflective of the Company's ongoing or core operations as further described below. The CODM does not review asset information by segment. Purchase accounting amortization: Represents the amortization of purchased intangible assets recorded in connection with the acquisition of Polycom. 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. The Company's deferred revenue primarily relates to service 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 guidelines. Acquisition costs: Represents charges incurred in connection with the pending Merger with HP. Stock-based compensation: Represents the non-cash expense associated with the Company's grant of stock-based awards to employees and non-employee directors. The following table presents segment results for revenue and gross margin, as reviewed by the CODM, and the related reconciliation to the Company's condensed consolidated GAAP results: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Segment revenues, as reviewed by CODM Products $ 364,299 $ 371,379 Services 51,588 61,053 Total segment revenues, as reviewed by CODM $ 415,887 $ 432,432 Segment gross profit, as reviewed by CODM Products $ 151,095 $ 153,548 Services 35,756 40,266 Total segment gross profit, as reviewed by CODM $ 186,851 $ 193,814 Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Total segment revenues, as reviewed by CODM $ 415,887 $ 432,432 Deferred revenue purchase accounting (328) (1,260) GAAP net revenues $ 415,559 $ 431,172 Total segment gross profit, as reviewed by CODM (1) $ 186,851 $ 193,814 Purchase accounting amortization (16,472) (16,238) Deferred revenue purchase accounting (328) (1,260) Acquisition costs (507) — Stock-based compensation (1,503) (1,127) GAAP gross profit $ 168,041 $ 175,189 |
BACKGROUND AND BASIS OF PRESE_2
BACKGROUND AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Jul. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | The Company's unaudited condensed consolidated financial statements and accompanying notes are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and contain all necessary adjustments, which are normal and recurring in nature, necessary to provide a fair financial statement presentation for the periods presented. The condensed consolidated balance sheet for April 2, 2022 was derived from audited financial statements. The financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated. The unaudited condensed consolidated financial statements and accompanying notes should be reviewed in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended April 2, 2022, filed with the Securities and Exchange Commission (“SEC”) on May 27, 2022. |
Fiscal period | The Company’s fiscal year ends on the Saturday closest to the last day of March. The Company’s current and prior fiscal years end on April 1, 2023 and April 2, 2022, respectively, and both consist of 52 weeks. The three months ended July 2, 2022 and July 3, 2021 both consist of 13 weeks. |
Risks and uncertainties | |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with current year presentation. Each of the reclassifications was immaterial and had no effect on the Company's results of operations or cash flows. |
Fair Value Measurements | Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. In determining fair value, we use various valuation approaches. The hierarchy of those valuation approaches is in three levels based on the reliability of inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following is a summary of the hierarchy levels: • Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. • Level 3: Inputs are unobservable for the asset or liability. |
DETAILS OF CERTAIN BALANCE SH_2
DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Accounts receivable, net | Accounts receivable, net (in thousands) July 2, 2022 April 2, 2022 Accounts receivable $ 359,643 $ 381,744 Provisions for promotions and rebates (84,190) (102,499) Provisions for doubtful accounts and sales allowances (514) (1,321) Accounts receivable, net $ 274,939 $ 277,924 |
Inventory, net | Inventory, net (in thousands) July 2, 2022 April 2, 2022 Raw materials $ 94,943 $ 90,192 Work in process 1,164 1,656 Finished goods 149,082 142,254 Inventory, net $ 245,189 $ 234,102 |
Accrued liabilities | Accrued Liabilities (in thousands) July 2, 2022 April 2, 2022 Short-term deferred revenue $ 122,412 $ 128,339 Employee compensation and benefits 67,804 69,011 Provision for returns 17,520 17,672 Accrued other 109,483 123,814 Accrued liabilities $ 317,219 $ 338,836 |
Changes in the warranty obligation | Changes in the warranty obligation during the three months ended July 2, 2022 and July 3, 2021 were as follows: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Warranty obligation at beginning of period $ 18,711 $ 17,384 Warranty provision related to products shipped 4,733 4,157 Deductions for warranty claims processed (6,494) (6,800) Adjustments related to preexisting warranties 1,848 3,603 Warranty obligation at end of period $ 18,798 $ 18,344 |
PURCHASED INTANGIBLE ASSETS (Ta
PURCHASED INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | As of July 2, 2022 and April 2, 2022, the carrying value of purchased intangible assets is as follows: July 2, 2022 April 2, 2022 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets Existing technology $ 429,923 $ (358,575) $ 71,348 1.1 years $ 429,923 $ (342,103) $ 87,820 Customer relationships 240,024 (173,157) 66,867 2.0 years 240,024 (164,799) 75,225 Trade name/Trademarks 115,600 (51,378) 64,222 5.0 years 115,600 (48,167) 67,433 Total intangible assets $ 785,547 $ (583,110) $ 202,437 2.6 years $ 785,547 $ (555,069) $ 230,478 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization expense attributable to purchased intangible assets as of July 2, 2022 was as follows: (in thousands) Amount 2023 (remaining nine months) 84,124 2024 66,869 2025 22,544 2026 12,844 2027 12,844 Thereafter 3,212 Total $ 202,437 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancelable operating leases as of July 2, 2022 were as follows: (in thousands) Operating Leases (1) 2023 (remaining nine months) $ 9,983 2024 12,485 2025 9,166 2026 7,956 2027 6,344 Thereafter 10,802 Total lease payments 56,736 Less: Imputed interest (2) (6,167) Present value of lease liabilities $ 50,569 (1) The weighted average remaining lease term was 4.9 years as of July 2, 2022. (2) The weighted average discount rate was 4.5% as of July 2, 2022. |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Debt at Fair Value | The carrying value of the Company's outstanding debt as of July 2, 2022 and April 2, 2022 was as follows: (in thousands) July 2, 2022 April 2, 2022 4.75% Senior Notes $ 494,925 $ 494,737 Term loan facility 1,006,412 1,005,546 |
Summary of Debt Redemption | The Company may redeem all or part of the 4.75% Senior Notes, upon not less than a 15-day or more than a 60-day notice, however, the applicable redemption price will be determined as follows: Redemption Period Requiring Payment of: Redemption Up To 40% Using Cash Proceeds From An Equity Offering (3) Make-Whole (1) Premium (2) Date Specific Price 4.75% Senior Notes Prior to March 1, 2024 On or after March 1, 2024 Prior to March 1, 2024 104.75% (1) If the Company redeems the notes prior to the applicable date, the price is principal plus a make-whole premium, which means, the greater of (i) 1.0% of the principal or (ii) the excess of the present value of the redemption price at March 1, 2024 plus interest through March 1, 2024 over the principal amount. (2) If the Company redeems the notes on or after the applicable date, the price is principal plus a premium which declines over time, as specified in the applicable indenture, together with accrued and unpaid interest. |
RESTRUCTURING AND OTHER RELAT_2
RESTRUCTURING AND OTHER RELATED CHARGES (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring and other related charges recognized in the Company's condensed consolidated statements of operations is as follows: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Severance $ (422) $ 19,301 Facility 151 (472) Other (1) 132 4,103 Total cash charges (139) 22,932 Non-cash charges (2) 90 6,040 Total restructuring and other related charges $ (49) $ 28,972 (1) Other costs primarily represent associated legal and advisory services. (2) Non-cash charges primarily represent accelerated depreciation due to the closure or consolidation of facilities. Changes in the Company's restructuring liabilities during the three months ended July 2, 2022 are as follows: (in thousands) As of April 2, 2022 Accruals (1) Cash Payments As of July 2, 2022 Severance $ 4,502 $ (422) $ (2,244) $ 1,836 Facility 642 151 (490) 303 Other 85 132 (125) 92 Total $ 5,229 $ (139) $ (2,859) $ 2,231 (1) Excludes non-cash charges recorded in restructuring and other related charges in the condensed consolidated statements of operations for the three months ended July 2, 2022. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The components of accumulated other comprehensive income, net of tax, are as follows: (in thousands) July 2, 2022 April 2, 2022 Accumulated unrealized gain on cash flow hedges $ 34,466 $ 28,296 Accumulated foreign currency translation adjustments 4,615 4,615 Accumulated other comprehensive income $ 39,081 $ 32,911 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Offsetting Financial Assets Under Master Netting Agreements | Offsetting of Financial Assets/Liabilities under Master Netting Agreements with Derivative Counterparties As of July 2, 2022 Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Liabilities Cash Collateral Received Net Amount of Derivative Assets Derivatives subject to master netting agreements $ 40,032 $ (778) $ — $ 39,254 Derivatives not subject to master netting agreements — — Total $ 40,032 $ 39,254 Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Assets Cash Collateral Received Net Amount of Derivative Liabilities Derivatives subject to master netting agreements $ (778) $ 778 $ — $ — Derivatives not subject to master netting agreements — — Total $ (778) $ — As of April 2, 2022 Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Liabilities Cash Collateral Received Net Amount of Derivative Assets Derivatives subject to master netting agreements $ 31,891 $ (1,800) $ — $ 30,091 Derivatives not subject to master netting agreements — — Total $ 31,891 $ 30,091 Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Assets Cash Collateral Received Net Amount of Derivative Liabilities Derivatives subject to master netting agreements $ (1,800) $ 1,800 $ — $ — Derivatives not subject to master netting agreements — — Total $ (1,800) $ — |
Offsetting Financial Liabilities Under Master Netting Agreements | Offsetting of Financial Assets/Liabilities under Master Netting Agreements with Derivative Counterparties As of July 2, 2022 Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Liabilities Cash Collateral Received Net Amount of Derivative Assets Derivatives subject to master netting agreements $ 40,032 $ (778) $ — $ 39,254 Derivatives not subject to master netting agreements — — Total $ 40,032 $ 39,254 Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Assets Cash Collateral Received Net Amount of Derivative Liabilities Derivatives subject to master netting agreements $ (778) $ 778 $ — $ — Derivatives not subject to master netting agreements — — Total $ (778) $ — As of April 2, 2022 Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Liabilities Cash Collateral Received Net Amount of Derivative Assets Derivatives subject to master netting agreements $ 31,891 $ (1,800) $ — $ 30,091 Derivatives not subject to master netting agreements — — Total $ 31,891 $ 30,091 Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements (in thousands) Gross Amount of Eligible Offsetting Recognized Derivative Assets Cash Collateral Received Net Amount of Derivative Liabilities Derivatives subject to master netting agreements $ (1,800) $ 1,800 $ — $ — Derivatives not subject to master netting agreements — — Total $ (1,800) $ — |
Summary of Outstanding Derivative Contracts | The gross fair value of the Company's outstanding derivative contracts at July 2, 2022 and April 2, 2022 was as follows: (in thousands) July 2, 2022 April 2, 2022 Derivative assets (1) Non-designated hedges $ 2,314 $ 1,590 Cash flow hedges 9,194 4,688 Interest rate swaps 28,524 25,613 Total derivative assets $ 40,032 $ 31,891 Derivative liabilities (2) Non-designated hedges $ 89 $ 39 Cash flow hedges 496 384 Interest rate swaps 193 1,377 Accrued interest (24) 28 Total derivative liabilities $ 754 $ 1,828 (1) Short-term derivative assets are recorded in other current assets and long-term derivative assets are recorded in other non-current assets on the condensed consolidated balance sheets. As of July 2, 2022 , the portion of derivative assets classified as long-term was $11.6 million. As of April 2, 2022 , the portion of derivative assets classified as long-term was $16.1 million. (2) Short-term derivative liabilities are recorded in accrued liabilities and long-term derivative liabilities are recorded in other non-current liabilities on the condensed consolidated balance sheets. As of July 2, 2022, the portion of derivative liabilities classified as long-term was $0.1 million. As of April 2,2022, the portion of derivative liabilities classified as long-term was $0.1 million. |
Notional Value of Outstanding Foreign Exchange Currency Contracts | The following table summarizes the notional value of the Company’s outstanding foreign exchange currency contracts and approximate USD equivalent at July 2, 2022: (in thousands) Local Currency USD Equivalent Position Maturity EUR € 51,900 $ 54,070 Sell EUR 1 month GBP £ 7,200 $ 8,664 Sell GBP 1 month The notional value of the Company's outstanding EUR and GBP option and forward contracts at the end of each period was as follows: July 2, 2022 April 2, 2022 (in millions) EUR GBP EUR GBP Option contracts €84.4 £17.3 €72.8 £14.2 Forward contracts €69.4 £13.8 €68.1 £14.1 (in thousands) Local Currency USD Equivalent Position Maturity MXN 362,970 $ 17,293 Buy MXN Monthly over a nine month period |
Effect of Non-Designated Derivative Contracts Recognized in Interest and Other Income, Net | The effect of non-designated derivative contracts on results of operations recognized in other non-operating income, net in the condensed consolidated statements of operations was as follows: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Gain (loss) on foreign exchange contracts $ 6,713 $ (486) |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the pre-tax effects of derivative instruments designated as cash flow hedges on accumulated other comprehensive income (loss) and the condensed consolidated statements of operations for the three months ended July 2, 2022 and July 3, 2021: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Loss included in accumulated other comprehensive income (loss), as of beginning of period $ 26,805 $ (10,062) Gain (loss) recognized in other comprehensive income (loss) 10,094 440 Amount of (gain) loss reclassified from accumulated other comprehensive income (loss) into net revenues (3,365) 1,772 Amount of gain reclassified from accumulated other comprehensive income (loss) into cost of revenues (446) (236) Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense 622 3,089 Total amount of (gain) loss reclassified from accumulated other comprehensive income to the condensed consolidated statements of operations (3,189) 4,625 Gain (loss) included in accumulated other comprehensive income (loss), as of end of period $ 33,710 $ (4,997) |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring | Carrying Value at Fair Value at July 2, 2022 (in thousands) Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 142,362 $ 142,362 $ — $ — Short-term investments 11,908 11,908 — — Derivative instruments 40,032 — 40,032 — Liabilities: Derivative instruments $ 754 $ — $ 754 $ — Long-term debt 1,501,337 — 1,507,708 — Carrying Value at Fair Value at April 2, 2022 (in thousands) Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 170,000 $ 170,000 $ — $ — Short-term investments 13,703 13,703 — — Derivative instruments 31,891 — 31,891 — Liabilities: Derivative instruments $ 1,828 $ — $ 1,828 $ — Long-term debt 1,500,283 — 1,521,562 — |
COMPUTATION OF (LOSS) EARNING_2
COMPUTATION OF (LOSS) EARNINGS PER COMMON SHARE (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings per Common Share | The following table sets forth the computation of basic and diluted (loss) earnings per common share for the three months ended July 2, 2022 and July 3, 2021: Three Months Ended (in thousands, except per share data) July 2, 2022 July 3, 2021 Numerator: Net loss $ (33,087) $ (36,811) Denominator: Weighted-average basic shares outstanding 43,428 42,061 Weighted-average diluted shares outstanding 43,428 42,061 Basic and diluted loss per common share $ (0.76) $ (0.88) Diluted loss per common share $ (0.76) $ (0.88) Potentially dilutive securities excluded from diluted loss per common share because their effect is anti-dilutive 175 405 |
REVENUE AND MAJOR CUSTOMERS (Ta
REVENUE AND MAJOR CUSTOMERS (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Net Revenues by Product Group | The following table disaggregates revenues by major product category for the three months ended July 2, 2022 and July 3, 2021: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Net revenues Headsets $ 175,811 $ 172,194 Voice 65,284 61,298 Video 123,113 137,711 Services 51,351 59,969 Total net revenues $ 415,559 $ 431,172 |
Net Revenues by Geography | The following table presents total net revenues by geography: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Net product revenues U.S. $ 171,408 $ 175,970 Europe, Middle East, and Africa 107,683 111,460 Asia Pacific 55,729 58,270 Americas, excluding U.S. 29,388 25,503 Total international net product revenues 192,800 195,233 Total net product revenues $ 364,208 $ 371,203 Net service revenues U.S. $ 21,040 $ 22,758 Europe, Middle East, and Africa 12,307 14,661 Asia Pacific 14,701 18,488 Americas, excluding U.S. 3,303 4,062 Total international net service revenues 30,311 37,211 Total net service revenues $ 51,351 $ 59,969 Total net revenues $ 415,559 $ 431,172 |
SEGMENT REPORTING AND GEOGRAP_2
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Jul. 02, 2022 | |
Segments, Geographical Areas [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following table presents segment results for revenue and gross margin, as reviewed by the CODM, and the related reconciliation to the Company's condensed consolidated GAAP results: Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Segment revenues, as reviewed by CODM Products $ 364,299 $ 371,379 Services 51,588 61,053 Total segment revenues, as reviewed by CODM $ 415,887 $ 432,432 Segment gross profit, as reviewed by CODM Products $ 151,095 $ 153,548 Services 35,756 40,266 Total segment gross profit, as reviewed by CODM $ 186,851 $ 193,814 Three Months Ended (in thousands) July 2, 2022 July 3, 2021 Total segment revenues, as reviewed by CODM $ 415,887 $ 432,432 Deferred revenue purchase accounting (328) (1,260) GAAP net revenues $ 415,559 $ 431,172 Total segment gross profit, as reviewed by CODM (1) $ 186,851 $ 193,814 Purchase accounting amortization (16,472) (16,238) Deferred revenue purchase accounting (328) (1,260) Acquisition costs (507) — Stock-based compensation (1,503) (1,127) GAAP gross profit $ 168,041 $ 175,189 |
DEFERRED COMPENSATION (Details)
DEFERRED COMPENSATION (Details) - USD ($) $ in Millions | Jul. 02, 2022 | Apr. 02, 2022 |
Short-term investments | Mutual Funds | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Investments | $ 11.9 | $ 13.7 |
Other long-term liabilities | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation liability, noncurrent | $ 11.9 | $ 13.7 |
DETAILS OF CERTAIN BALANCE SH_3
DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS - Accounts Receivable, net (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Accounts receivable, net [Line Items] | ||
Accounts receivable | $ 359,643 | $ 381,744 |
Accounts receivable, net | 274,939 | 277,924 |
Provisions for promotions and rebates | ||
Accounts receivable, net [Line Items] | ||
Accounts receivable, reserves | (84,190) | (102,499) |
Provisions for doubtful accounts and sales allowances | ||
Accounts receivable, net [Line Items] | ||
Accounts receivable, reserves | $ (514) | $ (1,321) |
DETAILS OF CERTAIN BALANCE SH_4
DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS - Inventory, net (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Inventory, Net [Abstract] | ||
Raw materials | $ 94,943 | $ 90,192 |
Work in process | 1,164 | 1,656 |
Finished goods | 149,082 | 142,254 |
Inventory, net | $ 245,189 | $ 234,102 |
DETAILS OF CERTAIN BALANCE SH_5
DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Accrued Liabilities [Abstract] | ||
Short-term deferred revenue | $ 122,412 | $ 128,339 |
Employee compensation and benefits | 67,804 | 69,011 |
Provision for returns | 17,520 | 17,672 |
Accrued other | 109,483 | 123,814 |
Accrued liabilities | $ 317,219 | $ 338,836 |
DETAILS OF CERTAIN BALANCE SH_6
DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS - Warranty Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Changes in the Warranty Obligation [Roll Forward] | ||
Warranty obligation at beginning of period | $ 18,711 | $ 17,384 |
Warranty provision related to products shipped | 4,733 | 4,157 |
Deductions for warranty claims processed | (6,494) | (6,800) |
Adjustments related to preexisting warranties | 1,848 | 3,603 |
Warranty obligation at end of period | $ 18,798 | $ 18,344 |
PURCHASED INTANGIBLE ASSETS - C
PURCHASED INTANGIBLE ASSETS - Carrying Value (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Apr. 02, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | $ 785,547 | $ 785,547 |
Accumulated Amortization | (583,110) | (555,069) |
Total | $ 202,437 | 230,478 |
Weighted Average Remaining Useful Life | 2 years 7 months 6 days | |
Existing technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 429,923 | 429,923 |
Accumulated Amortization | (358,575) | (342,103) |
Total | $ 71,348 | 87,820 |
Weighted Average Remaining Useful Life | 1 year 1 month 6 days | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 240,024 | 240,024 |
Accumulated Amortization | (173,157) | (164,799) |
Total | $ 66,867 | 75,225 |
Weighted Average Remaining Useful Life | 2 years | |
Trade name/Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 115,600 | 115,600 |
Accumulated Amortization | (51,378) | (48,167) |
Total | $ 64,222 | $ 67,433 |
Weighted Average Remaining Useful Life | 5 years |
PURCHASED INTANGIBLE ASSETS - N
PURCHASED INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 28 | $ 30.4 |
PURCHASED INTANGIBLE ASSETS - A
PURCHASED INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining nine months) | $ 84,124 | |
2024 | 66,869 | |
2025 | 22,544 | |
2026 | 12,844 | |
2027 | 12,844 | |
Thereafter | 3,212 | |
Total | $ 202,437 | $ 230,478 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Future Minimum Lease Payments (Details) $ in Thousands | Jul. 02, 2022 USD ($) |
Loss Contingencies [Line Items] | |
Weighted average remaining lease term | 4 years 10 months 24 days |
Weighted average discount rate | 4.50% |
Liability | |
Loss Contingencies [Line Items] | |
2023 (remaining nine months) | $ 9,983 |
2024 | 12,485 |
2025 | 9,166 |
2026 | 7,956 |
2027 | 6,344 |
Thereafter | 10,802 |
Total lease payments | 56,736 |
Less: imputed interest | (6,167) |
Present value of lease liabilities | $ 50,569 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | Jul. 02, 2022 USD ($) |
Loss Contingencies [Line Items] | |
Unconditional purchase obligations | $ 687.6 |
Unconditional purchase obligation, supplies | 557 |
Merger Agreement | |
Loss Contingencies [Line Items] | |
Contractual obligation | 28.7 |
Inventories | |
Loss Contingencies [Line Items] | |
Unconditional purchase obligations | $ 77.4 |
DEBT (Details)
DEBT (Details) | 1 Months Ended | 9 Months Ended | ||||||||
Dec. 29, 2021 USD ($) | May 17, 2021 USD ($) | Mar. 04, 2021 USD ($) | Dec. 26, 2020 | Jul. 02, 2018 USD ($) | Mar. 31, 2021 USD ($) | May 31, 2015 USD ($) | Dec. 26, 2020 | Jul. 02, 2022 USD ($) letter_of_credit | Apr. 02, 2022 USD ($) | |
Debt Disclosure [Line Items] | ||||||||||
Unamortized discount (premium) and debt issuance costs, net | $ 15,500,000 | $ 16,500,000 | ||||||||
Percentage multiplied by funded amount | 0.25% | |||||||||
Interest rate in excess of applicable rate | 2% | |||||||||
Number of letters of credit | letter_of_credit | 3 | |||||||||
5.50% Senior Notes | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Principal amount repurchased | $ 493,900,000 | |||||||||
Senior Notes | 5.50% Senior Notes | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Stated interest rate of debt instrument | 5.50% | |||||||||
Principal amount of debt issued | $ 500,000,000 | |||||||||
Proceeds from issuance of senior notes, net of issuance costs | 488,400,000 | |||||||||
Debt issuance costs | $ 11,600,000 | |||||||||
Senior Notes | 4.75% Senior Notes | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Stated interest rate of debt instrument | 4.75% | |||||||||
Principal amount of debt issued | $ 500,000,000 | |||||||||
Proceeds from issuance of senior notes, net of issuance costs | $ 493,900,000 | |||||||||
Debt issuance costs | $ 6,100,000 | |||||||||
Debt redemption price, percentage | 104.75% | |||||||||
Repurchase price, percentage of principal amount | 101% | |||||||||
Secured Debt | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Unamortized discount (premium) and debt issuance costs, net | $ 30,000,000 | |||||||||
Principal amount of debt issued | 1,275,000,000 | |||||||||
Long-term debt | 1,245,000,000 | |||||||||
Minimum | Senior Notes | 4.75% Senior Notes | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Debt redemption notice period | 15 days | |||||||||
Debt redemption price, percentage | 50% | |||||||||
Maximum | Senior Notes | 4.75% Senior Notes | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Debt redemption notice period | 60 days | |||||||||
Debt redemption price, percentage of principal amount redeemed | 40% | |||||||||
Level 2 | Carrying Value | Senior Notes | 4.75% Senior Notes | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Long-term debt | $ 494,925,000 | 494,737,000 | ||||||||
Revolving Credit Facility | Line of Credit | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Maximum borrowing capacity of unsecured revolving credit facility | $ 100,000,000 | |||||||||
Percentage over LIBOR multiplied by daily amount available under facility | 50% | |||||||||
Depreciation and amortization, percent | 10% | |||||||||
Letters of credit outstanding, amount | 2,400,000 | |||||||||
Revolving Credit Facility | Minimum | Line of Credit | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Commitment fee percentage | 0.20% | |||||||||
Revolving Credit Facility | Maximum | Line of Credit | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Commitment fee percentage | 0.30% | |||||||||
Revolving Credit Facility | Level 2 | Carrying Value | Line of Credit | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Long-term debt | $ 1,006,412,000 | $ 1,005,546,000 | ||||||||
Federal Funds Rate | Secured Debt | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Spread for interest rate | 0.50% | |||||||||
London Interbank Offered Rate (LIBOR) | Secured Debt | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Spread for interest rate | 1% | |||||||||
Debt Instrument, Period, December Twenty Nine Twenty Twenty One Through December Twenty One Twenty Twenty Two | Revolving Credit Facility | Line of Credit | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Leverage ratio, maximum | 3.75 | |||||||||
Depreciation and amortization, amount | $ 30,000,000 | |||||||||
Debt Instrument, Period, December Thirty One Twenty Twenty Two and Thereafter | Revolving Credit Facility | Line of Credit | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Interest coverage ratio, minimum | 3 | |||||||||
Debt Instrument, Period, December Twenty Nine Twenty Twenty One and | Revolving Credit Facility | Line of Credit | ||||||||||
Debt Disclosure [Line Items] | ||||||||||
Leverage ratio, maximum | 3 |
RESTRUCTURING AND OTHER RELAT_3
RESTRUCTURING AND OTHER RELATED CHARGES - Restructuring Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Restructuring and Related Activities [Abstract] | ||
Severance | $ (422) | $ 19,301 |
Facility | 151 | (472) |
Other | 132 | 4,103 |
Total cash charges | (139) | 22,932 |
Non-cash charges | 90 | 6,040 |
Restructuring and other related charges | $ (49) | $ 28,972 |
RESTRUCTURING AND OTHER RELAT_4
RESTRUCTURING AND OTHER RELATED CHARGES - Restructuring Liabilities (Details) $ in Thousands | 3 Months Ended |
Jul. 02, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve beginning balance | $ 5,229 |
Accruals | (139) |
Cash Payments | (2,859) |
Restructuring reserve ending balance | 2,231 |
Severance | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve beginning balance | 4,502 |
Accruals | (422) |
Cash Payments | (2,244) |
Restructuring reserve ending balance | 1,836 |
Facility | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve beginning balance | 642 |
Accruals | 151 |
Cash Payments | (490) |
Restructuring reserve ending balance | 303 |
Other | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve beginning balance | 85 |
Accruals | 132 |
Cash Payments | (125) |
Restructuring reserve ending balance | $ 92 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income | $ 39,081 | $ 32,911 |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated unrealized gain on cash flow hedges | 34,466 | 28,296 |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated foreign currency translation adjustments | 4,615 | 4,615 |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income | $ 39,081 | $ 32,911 |
DERIVATIVES (Details)
DERIVATIVES (Details) $ in Thousands | 3 Months Ended | ||||
Jun. 15, 2021 USD ($) | Jul. 30, 2018 USD ($) | Jul. 02, 2022 USD ($) financial_institution | Jul. 03, 2021 USD ($) | Apr. 02, 2022 USD ($) | |
Derivative [Line Items] | |||||
Number of financial institutions company has International Swap and Derivatives Association agreements | financial_institution | 5 | ||||
Net losses reclassified into interest expense | $ 622 | $ 3,089 | |||
Unrealized cash flow hedge gains | 10,094 | $ 440 | |||
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Notional amount of contracts | $ 680,000 | $ 831,000 | |||
Term of derivative contract | 3 years | 4 years | |||
Fixed interest rate | 0.39% | 2.78% | |||
Unrealized gain (loss) on derivatives | 28,300 | ||||
Unrealized cash flow hedge gains | $ (16,900) | ||||
Cash flow hedges | Options Held | Minimum | |||||
Derivative [Line Items] | |||||
Term of derivative contract | 6 months | ||||
Cash flow hedges | Options Held | Maximum | |||||
Derivative [Line Items] | |||||
Term of derivative contract | 12 months | ||||
Cash flow hedges | Forward Contracts | |||||
Derivative [Line Items] | |||||
Term of derivative contract | 3 months | ||||
Other Liabilities | |||||
Derivative [Line Items] | |||||
Total derivative liabilities | $ 754 | $ 1,828 | |||
Other Liabilities | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Total derivative liabilities | $ 193 | $ 1,377 |
DERIVATIVES (Details 1)
DERIVATIVES (Details 1) - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Derivative [Line Items] | ||
Long-term derivative liabilities | $ 100 | $ 100 |
Derivative Asset, Noncurrent | 11,600 | 16,100 |
Other Current Assets | ||
Derivative [Line Items] | ||
Total derivative assets | 40,032 | 31,891 |
Other Current Assets | Non-designated hedges | ||
Derivative [Line Items] | ||
Total derivative assets | 2,314 | 1,590 |
Other Liabilities | ||
Derivative [Line Items] | ||
Total derivative liabilities | 754 | 1,828 |
Other Liabilities | Non-designated hedges | ||
Derivative [Line Items] | ||
Total derivative liabilities | 89 | 39 |
Cash flow hedges | Other Current Assets | Cash flow hedges | ||
Derivative [Line Items] | ||
Total derivative assets | 9,194 | 4,688 |
Cash flow hedges | Other Liabilities | Cash flow hedges | ||
Derivative [Line Items] | ||
Total derivative liabilities | 496 | 384 |
Interest Rate Swap | Other Current Assets | ||
Derivative [Line Items] | ||
Total derivative assets | 28,524 | 25,613 |
Interest Rate Swap | Other Liabilities | ||
Derivative [Line Items] | ||
Total derivative liabilities | 193 | 1,377 |
Accrued interest | $ (24) | $ 28 |
DERIVATIVES (Details 2)
DERIVATIVES (Details 2) - 3 months ended Jul. 02, 2022 € in Thousands, £ in Thousands, $ in Thousands | EUR (€) | USD ($) | GBP (£) |
EUR | |||
Derivative [Line Items] | |||
Notional amount of contracts | € 51,900 | $ 54,070 | |
Position | Sell EUR | ||
Maturity | 1 month | ||
GBP | |||
Derivative [Line Items] | |||
Notional amount of contracts | $ 8,664 | £ 7,200 | |
Position | Sell GBP | ||
Maturity | 1 month |
DERIVATIVES (Details 3)
DERIVATIVES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Gain (loss) on foreign exchange contracts | $ 6,713 | $ (486) |
DERIVATIVES (Details 4)
DERIVATIVES (Details 4) € in Millions, £ in Millions | Jul. 02, 2022 EUR (€) | Jul. 02, 2022 GBP (£) | Apr. 02, 2022 EUR (€) | Apr. 02, 2022 GBP (£) |
Option contracts | ||||
Derivative [Line Items] | ||||
Notional amount of contracts | € 84.4 | £ 17.3 | € 72.8 | £ 14.2 |
Forward contracts | ||||
Derivative [Line Items] | ||||
Notional amount of contracts | € 69.4 | £ 13.8 | € 68.1 | £ 14.1 |
DERIVATIVES (Details 5)
DERIVATIVES (Details 5) $ in Thousands, $ in Thousands | Jul. 02, 2022 USD ($) | Jul. 02, 2022 MXN ($) | Apr. 02, 2022 MXN ($) |
Foreign currency swap contract | |||
Derivative [Line Items] | |||
Notional amount of contracts | $ 17,293 | $ 362,970 | $ 572,400 |
DERIVATIVES (Details 6)
DERIVATIVES (Details 6) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Gain (Loss) Included in Accumulated Other Comprehensive Income [Roll Forward] | ||
Loss included in accumulated other comprehensive income (loss), as of beginning of period | $ 26,805 | $ (10,062) |
Gain (loss) recognized in other comprehensive income (loss) | 10,094 | 440 |
Amount of (gain) loss reclassified from accumulated other comprehensive income (loss) into net revenues | 415,559 | 431,172 |
Amount of gain reclassified from accumulated other comprehensive income (loss) into cost of revenues | (247,518) | (255,983) |
Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense | (16,121) | (21,782) |
Gain (loss) included in accumulated other comprehensive income (loss), as of end of period | 33,710 | (4,997) |
Reclassification out of Accumulated Other Comprehensive Income | ||
Gain (Loss) Included in Accumulated Other Comprehensive Income [Roll Forward] | ||
Amount of (gain) loss reclassified from accumulated other comprehensive income (loss) into net revenues | (3,365) | 1,772 |
Amount of gain reclassified from accumulated other comprehensive income (loss) into cost of revenues | (446) | (236) |
Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense | 622 | 3,089 |
Total amount of (gain) loss reclassified from accumulated other comprehensive income to the condensed consolidated statements of operations | $ (3,189) | $ 4,625 |
DERIVATIVES (Details) 7
DERIVATIVES (Details) 7 - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative Asset, Fair Value, Gross Asset | $ 40,032 | $ 31,891 |
Derivative Liability, Fair Value, Gross Liability | (778) | (1,800) |
Derivative Asset [Abstract] | ||
Derivative Asset, Not Subject to Master Netting Arrangement | 0 | 0 |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | 40,032 | 31,891 |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 39,254 | 30,091 |
Derivative Asset | 39,254 | 30,091 |
Derivative Liability [Abstract] | ||
Derivative Asset, Fair Value, Gross Liability | (778) | (1,800) |
Derivative Asset, Fair Value, Amount Offset Against Collateral | 0 | 0 |
Derivative Liability, Fair Value, Gross Asset | 778 | 1,800 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 0 | 0 |
Derivative Liability, Not Subject to Master Netting Arrangement | 0 | 0 |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 0 | 0 |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | (778) | (1,800) |
Derivative Liability | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Measurement, Recurring (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Apr. 02, 2022 |
Assets: | ||
Derivative instruments | $ 39,254 | $ 30,091 |
Liabilities: | ||
Derivative instruments | 0 | 0 |
Fair Value, Recurring | ||
Assets: | ||
Cash and cash equivalents | 142,362 | 170,000 |
Short-term investments | 11,908 | 13,703 |
Derivative instruments | 40,032 | 31,891 |
Liabilities: | ||
Derivative instruments | 754 | 1,828 |
Long-term debt | 1,501,337 | 1,500,283 |
Level 1 | Fair Value, Recurring | ||
Assets: | ||
Cash and cash equivalents | 142,362 | 170,000 |
Short-term investments | 11,908 | 13,703 |
Derivative instruments | 0 | 0 |
Liabilities: | ||
Derivative instruments | 0 | 0 |
Long-term debt | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Derivative instruments | 40,032 | 31,891 |
Liabilities: | ||
Derivative instruments | 754 | 1,828 |
Long-term debt | 1,507,708 | 1,521,562 |
Level 3 | Fair Value, Recurring | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Derivative instruments | 0 | 0 |
Liabilities: | ||
Derivative instruments | 0 | 0 |
Long-term debt | $ 0 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | Apr. 02, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 3% | 10.40% | ||
Income tax benefit | $ (1,038) | $ (4,262) | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 91,100 | |||
Net deferred tax assets | 204,500 | |||
Deferred income tax expense (benefit) | $ 113,400 | (1,243) | $ 5,943 | |
Unrecognized Tax Benefits, Period Increase (Decrease) | 1,100 | |||
Unrecognized tax benefits | $ 14,300 | |||
Operating loss carryforwards | $ 48,000 |
COMPUTATION OF (LOSS) EARNING_3
COMPUTATION OF (LOSS) EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Numerator: | ||
Net loss | $ (33,087) | $ (36,811) |
Denominator: | ||
Weighted average common shares-basic (in shares) | 43,428 | 42,061 |
Weighted average common shares-diluted (in shares) | 43,428 | 42,061 |
Basic earnings (loss) per common share (in dollars per share) | $ (0.76) | $ (0.88) |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.76) | $ (0.88) |
Potentially dilutive securities excluded from diluted earnings per common share because their effect is anti-dilutive | 175 | 405 |
REVENUE AND MAJOR CUSTOMERS - D
REVENUE AND MAJOR CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Revenue from External Customer [Line Items] | ||
Net revenues | $ 415,559 | $ 431,172 |
Headset | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 175,811 | 172,194 |
Voice | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 65,284 | 61,298 |
Video | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 123,113 | 137,711 |
Service | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 51,351 | 59,969 |
Product | ||
Revenue from External Customer [Line Items] | ||
Net revenues | $ 364,208 | $ 371,203 |
REVENUE AND MAJOR CUSTOMERS - N
REVENUE AND MAJOR CUSTOMERS - Net Revenues By Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Revenue from External Customer [Line Items] | ||
Net revenues | $ 415,559 | $ 431,172 |
Product | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 364,208 | 371,203 |
Product | U.S. | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 171,408 | 175,970 |
Product | Europe, Middle East, and Africa | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 107,683 | 111,460 |
Product | Asia Pacific | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 55,729 | 58,270 |
Product | Americas, excluding U.S. | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 29,388 | 25,503 |
Product | Total international net product revenues | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 192,800 | 195,233 |
Service | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 51,351 | 59,969 |
Service | U.S. | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 21,040 | 22,758 |
Service | Europe, Middle East, and Africa | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 12,307 | 14,661 |
Service | Asia Pacific | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 14,701 | 18,488 |
Service | Americas, excluding U.S. | ||
Revenue from External Customer [Line Items] | ||
Net revenues | 3,303 | 4,062 |
Service | Total international net product revenues | ||
Revenue from External Customer [Line Items] | ||
Net revenues | $ 30,311 | $ 37,211 |
REVENUE AND MAJOR CUSTOMERS -_2
REVENUE AND MAJOR CUSTOMERS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Apr. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability | $ 183,600 | $ 193,100 |
Remaining performance obligation, current | 122,400 | 64,700 |
Revenue recognized | 42,900 | |
Contract assets | $ 3,500 | $ 4,300 |
SEGMENT REPORTING AND GEOGRAP_3
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION - Narrative (Details) | 3 Months Ended |
Jul. 02, 2022 segment | |
Segments, Geographical Areas [Abstract] | |
Number of operating segments | 2 |
SEGMENT REPORTING AND GEOGRAP_4
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION - Segments Results for Revenue and Gross Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total segment gross profit as reviewed by CODM | $ 168,041 | $ 175,189 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total segment revenues as reviewed by CODM | 415,887 | 432,432 |
Total segment gross profit as reviewed by CODM | 186,851 | 193,814 |
Operating Segments | Products Reportable Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total segment revenues as reviewed by CODM | 364,299 | 371,379 |
Total segment gross profit as reviewed by CODM | 151,095 | 153,548 |
Operating Segments | Services Reportable Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total segment revenues as reviewed by CODM | 51,588 | 61,053 |
Total segment gross profit as reviewed by CODM | $ 35,756 | $ 40,266 |
SEGMENT REPORTING AND GEOGRAP_5
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION - Segment Revenue and Gross Margin Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Net revenues | $ 415,559 | $ 431,172 |
Gross profit | 168,041 | 175,189 |
Depreciation, as reviewed by CODM | 3,200 | 3,600 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total segment revenues as reviewed by CODM | 415,887 | 432,432 |
Gross profit | 186,851 | 193,814 |
Purchase accounting amortization | (16,472) | (16,238) |
Segment Reconciling Items | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Deferred revenue purchase accounting | (328) | (1,260) |
Acquisition costs | (507) | 0 |
Stock-based compensation | $ (1,503) | $ (1,127) |