Plantronics CEO announces retirement; fiscal Q1 numbers come out ahead

 

Ken Kannappan
Ken Kannappan

SANTA CRUZ—After 21 years at the helm, Plantronics, Ken Kannappan announced Tuesday that he will step down Oct. 2 from his position as chief executive officer and president of the global headset maker.

Replacing him will be Joe Burton, 51, who joined the company five years ago as chief technology officer and senior vice president of corporate strategy, technology and development. Last year, Burton was appointed chief commercial officer responsible for establishing technology and product strategies as well as leadership of the global engineering, marketing, sales and product teams.

Joe Burton (Photo by Catherine Hall)
Joe Burton (Photo by
Catherine Hall)

Kannappan, 58, is expected to stay on as executive vice chairman reporting to Burton for a year.

“With regards to Ken’s retirement there is no reason other than they’ve been working towards this for years and the timing felt right,” said George Gutierrez, company spokesman.

Also announced Tuesday were the company’s numbers for the first quarter of fiscal 2017, which came out above expectations despite a $3 million sanction on the company relating to misconduct in an ongoing legal suit.

Although first quarter net income dropped about 4 percent from first quarter 2016, revenues climbed 8.1 percent and earnings per share climbed 12.7 percent. The company saw much of its gain in the consumer product division, which grew 23.1 percent year over year.

On a brief conference call to announce fiscal first quarter earnings, several analysts punctuated their questions with thanks and congratulations to Kannappan for years of discussions about the company.

In 1995, Plantronics was focused on the contact center headsets market with annual revenues of just over $100 million. Today, the fastest growing portion of the business has been its consumer division, which includes mono and stereo headsets for gaming, fitness, mobile, mono and stereo devices with sensor technology and software, in addition to products for the business sector. The company has about $856 million in annual revenues.

His legacy, said Susan Lovegren, senior vice president of human relations at Juniper Networks and former head of HR at Plantronics, is of “generous leadership.” She noted his tradition of writing personal birthday and holiday cards to each employee.

“People who work at Plantronics want to be there in part because of his leadership,” Lovegren said.

In a press release posted on the company’s website after the markets closed, Kannappan called Burton “a dynamic technology evangelist who is expert at envisioning key innovations and bringing them to market.”

Burton worked 10 years at Cisco Systems as vice president and chief technology officer before working as executive vice president, chief strategy officer, chief technology officer and general manager of the service provider business at Polycom, a video conferencing startup. Other previous leadership positions include working at Active Voice Corp., Bass Inc. He is the author of several communications patents and serves on the board of directors for the Dominican Hospital Foundation in Santa Cruz.

At Plantronics, Burton has worked closely with Kannappan, according to the release, to develop and execute the company’s strategic direction. He led efforts to grow its Unified Communications division, as well as the company’s conversion to a mix of hardware and software offerings “that are the foundation for Plantronics’ future success.”

“There couldn’t be a more exciting time to be at Plantronics and I’m committed to ensuring its enduring success,” said Burton in the release.

PLANTRONICS

WHAT: A publicly held audio communications headset manufacturer for businesses and consumers.

HEADQUARTERS: 345 Encinal St., Santa Cruz, CA 95060.

BACKGROUND: Founded in 1961, Plantronics introduced the first lightweight communications headset in 1962.

LEADERSHIP: Ken Kannappan, president and chief executive officer.

EMPLOYEES: The company reported a total head count of 3,666, including 465 in Santa Cruz.

INFORMATION: 831-426-5858; www.plantronics.com.

STOCK PRICE: Shares trading on the NYSE under the ticker PLT closed Tuesday at $ 47.72, down 96 cents. The 52-week range is $ 32.13 to $58.11.

FINANCIALS: First quarter 2017 net revenues were $223.1 million compared to $206.4 million a year ago in the same quarter. Net income was $20.39 million, or diluted earnings per share of 62 cents compared to $21.23 million or 55 cents a year ago in the same quarter. The company has $531.6 million in cash, cash equivalents and short and long-term investments.

DIVIDEND: The company announced a quarterly dividend of 15 cents per share to be paid Sept. 9 to all shareholders of record on Aug. 19.

GUIDANCE: The company expects revenues of $215 million to $225 million, diluted earnings per share of 51-61 cents for the second quarter of 2017, which ends in September.

 

This article was published in the Santa Cruz Sentinel.

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