- Achieved significant full year revenue and operating income growth in outdoor/fitness, marine and aviation. These growth segments generated 61% of the total operating income in 2010.
- Sold over 16 million units in 2010 with unit growth in outdoor/fitness and automotive OEM partially offsetting declines in personal navigation devices (PND).
- Continued to be the world-wide PND market share leader with gains in Europe and Asia.
- Sustained revenue growth in the outdoor/fitness segment as our fitness products continue to penetrate within the growing category.
- Continued to innovate across our product portfolio with enhanced offerings for over-the-road truck drivers and mariners to further our competitive position in each of these markets.
- Announced our expanding relationship with Chrysler on the UConnect Touch, developed in conjunction with Panasonic and available on numerous models including the Chrysler 300, Dodge Durango and Dodge Charger. Our relationship with Chrysler now extends to 15 makes and models.
- Introduced the GTU™ 10 GPS locator and web-based Garmin Tracker™ which represents a new product category for Garmin and is designed to serve the needs of many diverse markets – parents, pet owners, cyclists and runners to name just a few.
- Launched a suite of Garmin applications for iPhone and Android powered devices including StreetPilot® for iPhone, Garmin Tracker, myMechanic, and My-Cast® Lite.
One-time tax adjustments for 2010 totaled $98.7 million and include the release of uncertain tax position reserves from 2006 to 2008 related to our settlement in the US, offset by the amount of our settlement for the 2007 tax year in the US and Taiwan surtax expense due to the release of reserves. Normalized effective tax rate has been adjusted accordingly.
Executive overview from Dr. Min Kao, Chairman and Chief Executive Officer:
“While 2010 represented a year of adversity for our PND business and our handset initiative, we exit the year with a growing presence in outdoor/fitness, aviation, marine and auto OEM that give us confidence in the long-term outlook for Garmin,” said Dr. Min Kao, chairman and chief executive officer of Garmin Ltd. “Strong revenue and operating income performance in these segments was a highlight for the year and a foundation on which we hope to grow. The business generated free cash flow of $738 million which further strengthened our debt-free balance sheet and afforded us the opportunity to return significant value to shareholders in 2010 through a dividend and share repurchases.
The automotive/mobile segment revenues declined 31% on a year-over-year
basis in the fourth quarter as the PND market declined from the 2009
holiday season, ASPs continued to decline, and significant revenues from
bundled lifetime map products were deferred into future periods. We
expect the PND market to continue to decline in 2011 with moderating
ASPs and an increasing impact of revenue deferrals as bundled lifetime
maps constitute a higher percentage of our product mix. Despite the
challenging headwinds, our strategy is to manage the business to
maintain our market leadership and maximize profitability. In addition,
we have accelerated our investment in the auto OEM category in response
to increasing opportunities in this market segment. Our broad strengths
and capabilities, including vertical integration, user interface design,
development agility, and high reliability solutions for other OEM
applications, differentiate Garmin from the competition.