Good Riddance To Plantronics' Marketing Director

| About: Plantronics Inc. (PLT)

One year and thirteen days ago, I said:

You see, PLT spent $11 million in its 2006 fiscal year (which ended April 2) on these ads. Without them, the company would have had an additional $8 million in net income, which in turn translates to $0.17 per share, or nearly 10 per cent of the total EPS generated. For FY2007 - get this - the company plans to increase marketing spend to $19 million. This adds an additional $0.13 drag on EPS, for a total FY07 hit of $0.30.

All this spending for a business that is essentially a duopoly between PLT and GN Store Nord, which fell in sympathy on the Plantronics miss. Although share gains can be meaningful in a duopolistic business, our bet is that PLT would fare better by making good, stylish headsets for office users, who are more concerned with quality and fashion elements than with who wore what headset in outer space. Our advice, save the $19 million, and cut a little additional cost by firing the guy who convinced you the ads are a good idea. We investors would rather keep the extra $0.30 for ourselves, thank you.

Then in October the company addressed the advertising spend on the conference call and I decided not to fight the strong tape and bought some shares. Or more specifically, I created a synthetic long position by selling May $20 puts and buying May $22.50 calls for net-zero cost.

Today Plantronics (NYSE:PLT) issued the following statement in an 8K:

On May 10, 2007, Plantronics, Inc. (”Plantronics”) announced that Mark Breier, the Senior Vice President and Chief Marketing Officer of Plantronics, will be leaving Plantronics effective May 16, 2007.

With the guy who convinced them to spend the money gone, and a few days left before the options expire, hopefully I’ll get a little more juice out of them.

Disclosure: author is long Plantronics at the time of publication.

PLT 1-yr chart:

PLT 1-yr chart