Garmin Reports Fourth Quarter Results with Increased Global Market Share and Significant Inventory Reduction

CAYMAN ISLANDS—(BUSINESS WIRE)—February 23, 2009— Garmin Ltd. (Nasdaq: GRMN) today announced fourth quarter results for the period ended December 27, 2008. Garmin has moved the earnings call to Monday, February 23, 2009 at 11:00 a.m. Eastern. Details regarding the call and webcast are available under the heading “Earnings Call Information.”

Fourth Quarter 2008 Financial Summary:

 
-- Total revenue of $1.048 billion, down 14% from $1.217 billion in fourth quarter 2007
-- Automotive/Mobile segment revenue decreased 17% to $828 million in fourth quarter 2008
-- Outdoor/Fitness segment revenue increased 5% to $120 million in fourth quarter 2008
-- Aviation segment revenue decreased 5% to $67 million in fourth quarter 2008
-- Marine segment revenue was flat at $33 million in fourth quarter 2008
-- All geographies slowed as poor economic conditions weighed on the business:

-- North America revenue was $761 million compared to $836 million, down 9%

-- Europe revenue was $251 million compared to $338 million, down 26%
-- Asia revenue was $36 million compared to $43 million, down 17%
-- Healthy gross margin of 41.1% compared to 44.3% in third quarter 2008 and 41.8% in fourth quarter 2007
-- Operating margin of 22.6% compared to 24.6% in third quarter 2008 and 25.7% in fourth quarter of 2007
-- Effective tax rate was 22.8% compared to 11.7% in fourth quarter 2007 resulting in a negative EPS impact of $0.11
-- Diluted earnings per share of $0.78 compared to $1.39 in fourth quarter 2007; excluding foreign exchange, EPS was $0.93 compared to $1.31 in the same quarter in 2007
-- Generated $340 million of free cash flow in the fourth quarter for a cash and marketable securities balance of just over $973 million
-- Significant inventory reduction from third quarter 2008 of $274 million resulting in year-end 2008 inventory of $425 million.

Fiscal Year 2008 Financial Summary:

 
-- Total revenue of $3.49 billion, up 10% from $3.18 billion in 2007
-- Automotive/Mobile segment revenue increased 8% to $2.54 billion in 2008
-- Outdoor/Fitness segment revenue increased 26% to $428 million in 2008
-- Aviation segment revenue increased 10% to $323 million in 2008
-- Marine segment revenue increased 1% to $204 million in 2008
-- All geographic areas experienced growth:
-- North America revenue was $2.34 billion compared to $2.07 billion, up 13%
-- Europe revenue was $1.01 billion compared to $969 million, up 5%
-- Asia revenue was $145 million compared to $144 million, up 1%
-- Solid 44.5% gross margin and 24.7% operating margin for the full year were better than expected
-- Generated $743 million of free cash flow with a debt-free balance sheet
-- Effective tax rate was 19.9% compared to 12.6% in 2007 resulting in a negative EPS impact of $0.31
-- Diluted earnings per share of $3.48 compared to $3.89 in 2007; excluding foreign exchange, EPS decreased 3% to $3.69 from $3.80 in 2007. Fiscal year EPS includes $0.27 related to a gain of $72 million from the sale and tender of our Tele Atlas N.V. shares.

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