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

Earnings Call Information

The information for Garmin Ltd.’s earnings call is as follows:

When:   Monday, February 23, 2009 at 11:00 a.m. Eastern
Where:

http://www.garmin.com/aboutGarmin/invRelations/irCalendar.html

How: Simply log on to the web at the address above or call to listen in at 800-891-6383.
Contact:

Email Contact

 

A phone recording will be available for five business days following the earnings call and can be accessed by dialing 800-642-1687 or (706) 645-9291 and utilizing the access code 81896620. An archive of the live webcast will be available until March 27, 2009 on the Garmin website at http://www.garmin.com. To access the replay, click on the Investor Relations link and click over to the Events Calendar page.

This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding the company’s estimated earnings and revenue for fiscal 2009, the Company’s expected segment revenue growth rate, margins, new products to be introduced in 2009 and the company’s plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors affecting Garmin, including, but not limited to, the risk factors that are described in the Annual Report on Form 10-K for the year ended December 29, 2007, and the Quarterly Report on Form 10-Q for the quarter ended September 27, 2008, filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2007 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

The global leader in satellite navigation, Garmin Ltd. and its subsidiaries have designed, manufactured, marketed and sold navigation, communication and information devices and applications since 1989 – most of which are enabled by GPS technology. Garmin’s products serve automotive, mobile, wireless, outdoor recreation, marine, aviation, and OEM applications. Garmin Ltd. is incorporated in the Cayman Islands, and its principal subsidiaries are located in the United States, Taiwan and the United Kingdom. For more information, visit Garmin's virtual pressroom at www.garmin.com/pressroom or contact the Media Relations department at 913-397-8200. Garmin, nüvi, Edge and Forerunner are registered trademarks, and nüvifone, Oregon, Colorado and GHP are trademarks of Garmin Ltd. or its subsidiaries.

All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved.

Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)
       
(Unaudited)  
December 27, December 29,
2008   2007
Assets
Current assets:
Cash and cash equivalents $ 696,335 $ 707,689
Marketable securities 12,886 37,551
Accounts receivable, net 741,321 952,513
Inventories, net 425,312 505,467
Deferred income taxes 49,825 107,376
Prepaid expenses and other current assets   58,746     22,179
Total current assets 1,984,425 2,332,775
 
Property and equipment, net 445,252 374,147
 
Marketable securities 262,009 386,954
Restricted cash 1,941 1,554
Licensing agreements, net 16,013 14,672
Other intangible assets, net   214,941     181,358
Total assets $ 2,924,581   $ 3,291,460
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 160,094 $ 341,053
Salaries and benefits payable 34,241 31,696
Accrued warranty costs 87,408 71,636
Accrued sales program costs 90,337 142,360
Other accrued expenses 87,021 138,243
Income taxes payable   20,075     76,895
Total current liabilities 479,176 801,883
 
Deferred income taxes 4,070 11,935
Non-current taxes 214,366 126,593
Other liabilities 1,115 435
 
Stockholders' equity:
Common stock, $0.005 par value, 1,000,000,000 shares authorized:
Issued and outstanding shares - 200,363,000 as of
December 27, 2008 and 216,980,000 as of
December 29, 2007 1,002 1,086
Additional paid-in capital - 132,264
Retained earnings 2,262,503 2,171,134
Accumulated other comprehensive income   (37,651 )   46,130
Total stockholders' equity   2,225,854     2,350,614
Total liabilities and stockholders' equity $ 2,924,581   $ 3,291,460
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
       
13-Weeks Ended 52-Weeks Ended
December 27, December 29, December 27, December 29,
2008 2007 2008 2007
Net sales $ 1,048,246 $ 1,217,021 $ 3,494,077 $ 3,180,319
 
Cost of goods sold   617,613     708,036   1,940,562     1,717,064
 
Gross profit 430,633 508,985 1,553,515 1,463,255
 
Selling, general and administrative expense 144,010 148,140 485,389 396,498
Research and development expense   50,205     47,543   206,109     159,406
Total operating expense   194,215     195,683   691,498     555,904
 
Operating income 236,418 313,302 862,017 907,351
 
Other income (expense):
Interest income 8,705 9,999 35,535 41,995
Foreign currency (40,104 ) 19,471 (35,286 ) 22,964
Gain on sale of equity securities - - 50,884 5,101
Other   (673 )   5,331   1,216     861
Total other income (expense)   (32,072 )   34,801   52,349     70,922
 
Income before income taxes 204,346 348,103 914,366 978,273
 
Income tax provision   46,613     40,836   181,518     123,262
 
Net income $ 157,733   $ 307,267 $ 732,848   $ 855,011
 
Net income per share:
Basic $ 0.78 $ 1.42 $ 3.51 $ 3.95
Diluted $ 0.78 $ 1.39 $ 3.48 $ 3.89
 

Weighted average common shares outstanding:

Basic 201,331 216,859 208,993 216,524
Diluted 201,824 220,918 210,680 219,875
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
  52-Weeks Ended
December 27,   December 29,
2008 2007
Operating Activities:
Net income $ 732,848 $ 855,011

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 46,910 35,524
Amortization 31,507 28,513
Loss (gain) on sale of property and equipment 124 560
Provision for doubtful accounts 32,355 3,617
Deferred income taxes 50,887 (57,843 )
Unrealized foreign currency losses/(gains) 15,887 (926 )
Provision for obsolete and slow moving inventories 24,461 34,975
Stock compensation expense 38,872 22,164
Realized gains on marketable securities (50,884 ) (5,101 )
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 206,101 (477,108 )
Inventories 83,035 (224,180 )
Other current assets (4,356 ) 6,213
Accounts payable (236,287 ) 174,781
Other current and non-current liabilities (3,827 ) 253,909
Income taxes payable (90,180 ) 55,548
Purchase of licenses   (15,289 )   (23,569 )
Net cash provided by operating activities 862,164 682,088
 
Investing activities:
Purchases of property and equipment (119,623 ) (156,778 )
Proceeds from sale of property and equipment 19 5
Purchase of intangible assets (6,971 ) (2,918 )
Purchase of marketable securities (373,580 ) (1,672,041 )
Redemption of marketable securities 504,324 1,784,816
Change in restricted cash (387 ) (29 )
Acquisitions, net of cash acquired   (60,131 )   (128,751 )
Net cash used in investing activities (56,349 ) (175,696 )
 
Financing activities:

Proceeds from issuance of common stock through stock purchase plan

9,029 5,730

Proceeds from issuance of common stock from exercise of stock options

2,875 11,278
Stock repurchase (671,847 ) (7,780 )
Dividends (150,251 ) (162,530 )
Payments on long term debt - (248 )
Tax benefit related to stock option exercise   2,143     17,434  
Net cash used in financing activities (808,051 ) (136,116 )
 
Effect of exchange rate changes on cash and cash equivalents (9,118 ) 92
   
Net (decrease)/increase in cash and cash equivalents (11,354 ) 370,368
Cash and cash equivalents at beginning of period   707,689     337,321  
Cash and cash equivalents at end of period $ 696,335   $ 707,689  
 
Garmin Ltd. And Subsidiaries
Revenue, Gross Profit, and Operating Income by Segment (Unaudited)
         
Reporting Segments
Outdoor/ Auto/

Fitness

Marine

Mobile

Aviation

Total

 
13-Weeks Ended December 27, 2008
 
Net sales $ 119,528 $ 33,245 $ 828,162 $ 67,311 $ 1,048,246
Gross profit $ 66,912 $ 17,128 $ 301,642 $ 44,951 $ 430,633
Operating income $ 43,703 $ 7,473 $ 162,914 $ 22,328 $ 236,418
 
13-Weeks Ended December 29, 2007
 
Net sales $ 114,303 $ 32,965 $ 998,726 $ 71,027 $ 1,217,021
Gross profit $ 61,038 $ 17,464 $ 381,807 $ 48,676 $ 508,985
Operating income $ 40,247 $ 7,343 $ 238,304 $ 27,408 $ 313,302
                     
 
52-Weeks Ended December 27, 2008
 
Net sales $ 427,783 $ 204,477 $ 2,538,411 $ 323,406 $ 3,494,077
Gross profit $ 246,746 $ 111,425 $ 977,595 $ 217,749 $ 1,553,515
Operating income $ 160,595 $ 59,983 $ 524,105 $ 117,334 $ 862,017
 
52-Weeks Ended December 29, 2007
 
Net sales $ 339,741 $ 203,399 $ 2,342,184 $ 294,995 $ 3,180,319
Gross profit $ 184,655 $ 110,169 $ 973,205 $ 195,226 $ 1,463,255
Operating income $ 120,234 $ 67,376 $ 608,750 $ 110,991 $ 907,351

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