| Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Management's Use of Estimates and Assumptions The Company's consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP.") The Company's reporting currency is United States Dollars ("USD.") In connection with the preparation of the consolidated financial statements, the Company is required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, net revenues, expenses, and the related disclosures. The Company bases its assumptions, estimates, and judgments on historical experience, current trends, future expectations, and other factors that management believes to be relevant at the time the consolidated financial statements are prepared. On an ongoing basis, the Company reviews its accounting policies, assumptions, estimates, and judgments, including those related to revenues and related reserves and allowances, inventory valuation, product warranty obligations, the useful lives of long-lived assets, including property, plant, and equipment, investment fair values, stock-based compensation, the valuation of and assessment of recoverability of intangible assets and their useful lives, income taxes, contingencies, and restructuring charges, to ensure that the consolidated financial statements are presented fairly and in accordance with U.S. GAAP. Because future events and their effects cannot be determined with certainty, actual results could differ from the Company's assumptions and estimates. Risks and Uncertainties The Company is subject to a greater degree of uncertainty than normal in making the judgments and estimates needed to apply its significant accounting policies due to the ongoing supply chain disruptions and COVID-19 pandemic. The Company has assessed accounting estimates and other matters, including those using prospective financial information, using information that is reasonably available as of the issuance date of the consolidated financial statements. The accounting estimates and other matters the Company has assessed included, but were not limited to, impairment of goodwill and other long-lived assets, provisions for doubtful accounts, valuation allowances for deferred tax assets, inventory and related reserves, and revenue recognition and related reserves. The Company may make changes to these estimates and judgments, which could result in material impacts to the consolidated financial statements in future periods. The extent and duration of the impact of the COVID-19 pandemic and the shortage of adequate component supply on the Company's business is highly uncertain and difficult to predict. The Company relies on contract manufacturers and sourcing of materials from the Asia Pacific region, as well as its owned manufacturing facility in Mexico. The Company has experienced disruptions in both its own supply chain as well as those of its contract manufacturers and suppliers both as a result of COVID-19 as well as the global shortage of key components. Such disruptions have had, and may continue to have, a material impact on the Company's ability to source critical component parts, complete production of its products, fulfill customer orders, and adversely affect the ability to meet customer demands as companies utilize work-from-home and hybrid work models. Additionally, if a significant number of the Company's workforce employed in any of these manufacturing facilities or in the Company's offices were to contract the virus, the Company may experience delays or the inability to develop, produce, and deliver the Company's products on a timely basis. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic and the supply chain disruptions, and it is possible that it could cause a local and/or global economic recession. The severity of the impact of the COVID-19 pandemic and supply chain disruptions on the Company's business will depend on a number of factors, including, but not limited to, the duration and severity of these factors and the extent and severity of the impact on its customers and suppliers, all of which are uncertain and cannot be predicted. The Company's future results of operations and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, including potential write-offs due to financial weakness and/or bankruptcy of its customers, supply chain disruptions and uncertain demand, and the impact of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by its customers and suppliers. As of the issuance date of these consolidated financial statements, the extent to which the COVID-19 pandemic and supply chain disruptions may materially impact the Company's financial condition, liquidity, or results of operations is uncertain. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. The Company has included the results of operations of acquired companies from the date of acquisition. All significant intercompany balances and transactions have been eliminated. Unless the context indicates otherwise, references to "we," "us," and "our" refer to Plantronics, Inc. and its subsidiaries. Fiscal Year The Company's fiscal year ends on the Saturday closest to the last day of March. The years ended April 2, 2022 ("Fiscal Year 2022"), April 3, 2021 ("Fiscal Year 2021"), and March 28, 2020 ("Fiscal Year 2020") had 52, 53, 52 weeks, respectively. Financial Instruments Cash and Cash Equivalents and Short-term Investments All highly liquid investments with original stated maturities of three months or less at the date of purchase are classified as cash equivalents. The Company's short-term investments consist of publicly traded mutual funds. The specific identification method is used to determine the cost of investments. Gains and losses are recorded in other non-operating expense (income), net in the consolidated statements of operations. Investments are classified as either short-term or long-term based on each instrument's underlying effective maturity date and reasonable expectations with regard to sales and redemptions of the instruments. The Company may sell its investments prior to their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management. Derivative Financial Instruments The Company measures all derivative instruments at fair value and reports them on the consolidated balance sheets as assets or liabilities. Changes in the fair value of derivatives are accounted for depending on the intended use of the derivative, designation of the hedging relationship, and whether or not the criteria to apply hedge accounting have been satisfied. The Company has significant assets and liabilities denominated in foreign currencies subjecting it to foreign currency risk. The Company enters into foreign exchange forward contracts to reduce the impact of currency fluctuations on assets and liabilities denominated in foreign currencies. The Company does not elect to apply hedge accounting for these forward contracts. Foreign currency forward contracts are measured at fair value with changes in fair value recorded within other non-operating expense (income), net in the consolidated statements of operations. Foreign currency forward contracts are valued using pricing models that use observable inputs. Gains and losses on these contracts are intended to offset the impact of foreign exchange rate changes on the underlying foreign currency denominated assets and liabilities, and therefore, do not subject the Company to material balance sheet risk. The Company has significant revenues and expenses denominated in foreign currencies subjecting it to foreign currency risk. The Company purchases foreign currency option contracts and cross-currency swaps that qualify as cash flow hedges, with maturities of up to 12 months, to reduce the volatility of cash flows related primarily to forecasted revenues and expenses. The designated derivative's gain or loss is initially recorded as a component of accumulated other comprehensive income (loss) and is subsequently reclassified into the line item in the consolidated statements of operations in which the hedged item is recorded, in the same period in which the transaction affects earnings. The cash flows from such hedges are presented in the same line item in the consolidated statements of cash flows as the items being hedged. The Company has floating rate debt subjecting it to interest rate risk. On June 15, 2021, the Company entered into a three-year amortizing interest rate swap in order to hedge against changes in cash flow (interest payments) attributable to fluctuations in the Company's variable rate debt. Additionally, on July 30, 2018, the Company entered into a four-year amortizing interest rate swap in order to hedge against changes in cash flows (interest payments) attributable to fluctuations in the Company's variable rate debt. The designated interest rate swaps' gain or loss are initially recorded as a component of accumulated other comprehensive income and are subsequently reclassified into interest expense in the consolidated statements of operations over the life of the underlying debt, as interest on the Company's floating rate debt is accrued. The Company does not hold or issue derivative financial instruments for speculative trading purposes. The Company enters into derivatives only with counterparties that are among the largest United States ("U.S.") banks, ranked by assets, in order to minimize its credit risk. To date, no counterparty has failed to meet its financial obligations under such contracts. Provision for Doubtful Accounts The Company maintains a provision for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers’ financial conditions and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks, and economic conditions that may affect a customer’s ability to pay. Inventory Valuation Inventories are valued at the lower of cost or net realizable value. The Company holds inventory for both its products and services businesses. Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. The Company writes down inventories that have become obsolete, are in excess of estimated demand, or are valued greater than net realizable value. The Company's estimate of write downs for excess and obsolete inventory is based on a detailed analysis of on-hand inventory and purchase commitments in excess of estimated demand. Product Warranty Obligations The Company’s products include a warranty that is typically one to two years in duration, depending on the product and region. The warranty provides assurance that the product complies with agreed-upon specifications and is not sold separately. The warran ty qualifies as an assurance warranty and is not a separate performance obligation. The Company records a liability for the estimated costs of warranties at the time the related revenue is recognized. The specific warranty terms and conditions range from one usiness. Factors that affect warranty obligations include product failure rates, estimated return rates, the amount of time lapsed from the date of sale to the date of return, material usage, service- related costs incurred in correcting product failure claims, and knowledge of specific product failures that are outside of the Company’s typical experience. Goodwill and Purchased Intangibles, net Goodwill has been measured as the excess of the cost of acquisition over the amount assigned to tangible and identifiable intangible assets acquired, less liabilities assumed. At least annually, in the fourth quarter of each Fiscal Year, or more frequently if indicators of impairment exist, management performs a review to determine if the carrying value of goodwill is impaired. Impairment testing is performed at the reporting unit level. The Company determines its reporting units by assessing whether discrete financial information is available and if segment management regularly reviews the results of that component. Goodwill has been assigned to reporting units. The Company performs an initial assessment of qualitative factors to determine whether the existence of events and circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of relevant events and circumstances, the Company determines that it is more-likely-than-not that the fair value of the reporting unit exceeds its carrying value and there is no indication of impairment, no further testing is performed. However, if the Company concludes otherwise, a quantitative impairment test must be performed by estimating the fair value of the reporting unit and comparing it with its carrying value, including goodwill. If the carrying amount of a reporting unit is greater than its estimated fair value, goodwill is written down by the excess amount, limited to the total amount of goodwill allocated to that reporting unit. Purchased intangibles are carried at cost and are amortized on a straight-line basis over their estimated useful lives. The Company does not have intangible assets with indefinite useful lives other than goodwill. The Company reviews its long-lived assets to be held and used, including property, plant, and equipment, right-of-use ("ROU") assets, and purchased intangibles, for impairment whenever events or changes in circumstances indicate that the carrying value of the related asset group may not be recoverable. Such conditions may include an economic downturn or a change in the assessment of future operations. The Company performs a recoverability test at the asset group level. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset group and its ultimate disposition. Measurement of any impairment loss is based on the amount by which the carrying value of the asset group exceeds its fair value. Property, Plant, and Equipment Property, plant, and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets, which range from one to 30 years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the remaining contractual lease term. Capitalized software costs are amortized on a straight-line basis over the estimated useful life of the assets. Leases The Company’s lease portfolio consists primarily of real estate facilities under operating leases. The Company determines if an arrangement is or contains a lease at inception. ROU assets and lease liabilities are recognized at commencement based on the present value of the future minimum lease payments over the lease term. The Company applies its incremental borrowing rate, which approximates the rate at which the Company would borrow, on a secured basis, in the country where the lease was executed, to determine the present value of the future minimum lease payments when the respective lease does not provide an implicit rate. Certain of the Company’s lease agreements include options to extend or renew the lease terms. Such options are excluded from the minimum lease obligation unless they are reasonably certain to be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. In addition, the Company elected to exclude leases with terms of one year or less from its consolidated balance sheets and to continue to separately account for lease and non-lease components. 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 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. The fair value of Level 2 long-term debt is determined based on inputs that were observable in the market, including the trading price, when available. For more information refer to Note 14, Fair Value Measurements . Revenue Recognition Total net revenues include gross revenue less sales discounts, product returns, and sales incentives, all of which require us to make estimates for the portion of these allowances that have yet to be credited or paid to our customers. Performance obligations are promises in a contract to transfer a distinct good or service to the customer, and are the basis for determining how revenue is recognized. Revenue is recognized when performance obligations are satisfied. Generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue related to product shipments is generally recognized once title and risk of loss of the product are transferred to the customer. The Company believes that transfer of title and risk of loss best represent the moment at which the customer’s ability to direct the use of and obtain substantially all the benefits of an asset have been achieved. The Company has elected to recognize the cost for freight and shipping when control over products have transferred to the customer as an expense in cost of revenues in the consolidated statements of operations. The Company's service revenue is recognized either over-time or at a point-in-time, depending on the nature of the offering. Revenues associated with non-cancelable maintenance and support contracts comprise approximately 81% of the Company's net service revenues and are recognized ratably over the contract term, which typically ranges between one and three years. The Company believes this recognition period faithfully depicts the pattern of transfer of control for maintenance and support as the services are provided in relatively even increments. For certain products, support or maintenance are provided free of charge without the purchase of a separate service contract. If the free service is determined to rise to the level of a performance obligation, the Company allocates a portion of the transaction price to the implied performance obligation and recognizes service revenues over the estimated implied service period, which can range between one month to several years, depending on the circumstances. Revenues associated with professional services are recognized when the Company has objectively determined that the obligation has been satisfied, which is usually upon customer acceptance. The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company allocates the transaction price of a contract to each identified performance obligation based on stand-alone selling price (“SSP.”) A fixed discount is always subject to allocation in this manner. If the transaction price is considered variable, the Company determines if the consideration is associated with one or many, but not all of the performance obligations, and allocates accordingly. Judgment is also required to determine the SSP for each distinct performance obligation. The Company derives SSP for its performance obligations through a stratification methodology and consider a number of characteristics, including consideration related to different service types, customers, and geographies. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. On occasion, the Company will fulfill only part of a purchase order due to lack of current availability for one or more items requested on an order. The Company's practice is to ship what is on hand, with the remaining goods shipped once the product is in stock, which is generally less than one year from the date of the order. Depending on the terms of the contract or operationally, undelivered or back-ordered items may be canceled by either party at their discretion. The distributor contracts are made under agreements that allow for rights of return and include various sales incentive programs, such as back-end rebates, discounts, marketing development funds, and other sales incentives. The Company can reasonably estimate the sales incentives due to an established sales history with customers and records the estimated reserves and allowances at the time the related revenue is recognized. Income Taxes Deferred income taxes are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. The Company records a valuation allowance against particular deferred income tax assets if it is more-likely-than-not that those assets will not be realized. The provision for (benefit from) income taxes comprise the Company's current tax liability and changes in deferred income tax assets and liabilities. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for (benefit from) income taxes. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are in accordance with applicable tax laws. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit, new tax legislation, or the change of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the effect of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest and penalties. The Company is subject to income taxes in the U.S. and foreign jurisdictions. At any one-time, multiple tax years are subject to audit by various tax authorities. The Company accounts for Global Intangible Low-Taxed Income as period costs when incurred. Earnings (Loss) Per Share The Company has stock-based compensation plans under which employees, non-employee directors, and consultants may be granted stock-based compensation awards. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share includes the effect of outstanding stock options, restricted stock, and shares purchased under the 2002 ESPP in accordance with the treasury stock method, except when their effect is anti-dilutive. For further details refer to Note 16, Computation of Earnings (Loss) Per Common Share . Comprehensive Income (Loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss.) Other comprehensive income (loss) refers to income, expenses, gains, and losses that are recorded as an element of stockholders’ equity (deficit), but which are excluded from net income. Accumulated other comprehensive income (loss), as presented in the accompanying consolidated balance sheets, consists of foreign currency translation adjustments and unrealized gains and losses on cash flow hedges, net of tax. Foreign Operations and Currency Translation The functional currency of each of the Company's subsidiaries is the USD. Assets and liabilities denominated in currencies other than the USD are re-measured at the period-end rates for monetary assets and liabilities and at historical rates for non-monetary assets and liabilities. Revenues and expenses are re-measured at average monthly rates, which approximate actual rates. Foreign currency transaction gains and losses are recognized in other non-operating expense (income), net, in the consolidated statements of operations and are immaterial for all periods presented. Stock-Based Compensation Expense The Company applies the provisions of Accounting Standards Codification (ASC) 718, Compensation - Stock Compensation , which requires the measurement and recognition of compensation expense for all stock-based compensation awards made to employees and non-employee directors based on estimated fair values as of the grant date. The Company recognizes compensation expense using the straight-line attribution approach over the service period for which the stock-based compensation is expected to vest. The Company estimates expected forfeitures at the time of grant based on historical activity, which the Company believes is indicative of expected future forfeitures. Treasury Shares From time to time, the Company repurchases shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions, in accordance with programs authorized by the Board of Directors ("Board"). Repurchased shares are held as treasury stock until such time as they are retired or re-issued. Retirements of treasury stock are non-cash equity transactions in which the reacquired shares are returned to the status of authorized but unissued and the cost is recorded as a reduction to both retained earnings and treasury stock. The stock repurchase programs are intended to offset the impact of dilution resulting from the Company's stock-based compensation programs. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term investments, and accounts receivable, net. The Company’s investment policy limits investments to highly rated securities. In addition, the Company limits the amount of credit exposure to any one issuer and restricts placement of these investments to issuers evaluated as creditworthy. As of April 2, 2022, the Company's investments were composed solely of mutual funds and money market funds. As of April 3, 2021, the Company's investments were composed solely of mutual funds and money market funds. Concentrations of credit risk with respect to accounts receivable, net are limited due to the large number of customers that comprise the Company’s customer base and their dispersion across different geographies and markets. Two customers, Ingram Micro Group and ScanSource, accounted for 38.7% and 22.3%, respectively, of total accounts receivable, net as of April 2, 2022. Two customers, ScanSource and Ingram Micro Group, accounted for 24.9% and 24.7%, respectively, of total accounts receivable, net as of April 3, 2021. The Company does not believe other significant concentrations of credit risk exist. The Company performs ongoing credit evaluations of its customers' financial condition and requires no collateral from its customers. The Company maintains a provision for doubtful accounts based upon expected collectability of all accounts receivable. Certain inventory components required by the Company and our original design and contract manufacturers are only available from a limited number of suppliers. The rapid rate of technological change, the necessity of developing and manufacturing products with short lifecycles, and global supply and demand may intensify these risks. The inability to obtain components as required, or to develop alternative sources, as required in the future, could result in delays or reductions in product shipments, which in turn could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. As a mitigation, the Company has ongoing efforts to identify alternative sourcing suppliers to eliminate reliance to the extent possible on one supplier. Related Party A vendor of the Company, Digital River, Inc. ("Digital River"), with whom the Company had an existing relationship prior to the Acquisition of Polycom for e-commerce services, is a wholly owned subsidiary of Siris Capital Group, LLC ("Siris"). Triangle Private Holdings II, LLC ("Triangle") is also a wholly owned subsidiary of Siris. Immediately prior to the Company's Acquisition of Polycom on July 2, 2018, Triangle was Polycom’s sole stockholder and pursuant to the Company's Stock Purchase Agreement with Triangle, Triangle owned approximately 17.8% of the Company's issued and outstanding stock. However, Triangle sold all of its stock in two block sales to a broker-dealer on August 27, 2020 and November 23, 2020. As a result of the first block sale, one of the directors previously appointed to the Board resigned pursuant to the Stockholder Agreement with Triangle. The Board waived the resignation requirement with respect to a second director previously appointed in accordance with the Stockholder Agreement with Triangle. As a consequence of these relationships, Digital River is considered a related party under ASC 850, Related-Party Disclosures . The Company had immaterial transactions with Digital River during Fiscal Years 2022, 2021 and 2020. As of April 3, 2021, Triangle did not hold any of the Company's stock. For the Fiscal Year of 2022, Triangle and its related parent companies were not considered related parties. Accounts Receivable Financing The Company holds a financing agreement with an unrelated third-party financing company (the "Financing Agreement") whereby the Company offers distributors and resellers direct or indirect financing on their purchases of products and services. In return, the Company agrees to pay the financing company a fee based on a pre-defined percentage of the transaction amount financed. In certain instances, the Financing Agreement results in a transfer of the Company's receivables, without recourse, to the financing company. If the transaction meets the applicable criteria under ASC 860, Transfers and Servicing ("ASC 860"), and is accounted for as a sale of financial assets, the related accounts receivable is excluded from the balance sheet upon receipt of the third-party financing company's payment remittance. In certain legal jurisdictions, the arrangements that involve maintenance services or products bundled with maintenance at one price do not qualify as sales of financial assets in accordance with the authoritative guidance. Accordingly, accounts receivable related to these arrangements are accounted for as a secured borrowing in accordance with ASC 860 and the Company records a liability for |
