Garmin Reports First Quarter 2011 Results with Strong Revenue Performance in all Segments

SCHAFFHAUSEN, Switzerland — (BUSINESS WIRE) — May 4, 2011 — Garmin Ltd. (Nasdaq: GRMN) today announced results for the fiscal quarter ended March 26, 2011.

First Quarter 2011 Financial Summary:

  • Total revenue of $508 million, up 18% from $431 million in first quarter 2010
  • Automotive/Mobile segment revenue increased 20% to $265 million
  • Outdoor segment revenue increased 12% to $67 million
  • Fitness segment revenue increased 30% to $56 million
  • Marine segment revenue increased 24% to $51 million
  • Aviation segment revenue increased 5% to $69 million
  • All geographies posted double-digit revenue growth:
  • North America revenue was $280 million compared to $243 million, up 15%
  • Europe revenue was $171 million compared to $145 million, up 18%
  • Asia revenue was $57 million compared to $43 million, up 34%
  • Gross margin improved sequentially and decreased year-over-year to 47% for first quarter 2011 from 45% in fourth quarter 2010 and 54% in first quarter 2010
  • Operating margin decreased year-over-year to 15%, compared to 19% in first quarter 2010
  • Effective tax rate declined to 1.5% in first quarter of 2011 compared to 18.0% in first quarter 2010
  • Earnings per share increased to $0.49 from $0.19 in first quarter 2010; pro forma EPS increased 13% to $0.43 from $0.38 in the same quarter in 2010 (Pro forma earnings per share excludes the impact of foreign currency transaction gain or loss)
  • Generated $200 million of free cash flow in first quarter 2011

Note: In accordance with GAAP, the Company is deferring significant revenue and the related costs associated with high margin sales of lifetime maps, connected services and premium traffic over their economic lives. In the first quarter of 2011, the Company deferred, net of amortization of previous deferrals, $22 million of revenue, $4 million of costs, and approximately $0.09 of diluted EPS, net of taxes, into future years. This compares to first quarter of 2010 net deferrals of $15 million of revenue, $3 million of costs, and approximately $0.05 of diluted EPS, net of taxes. A table outlining the impact of this net deferral in both 2011 and 2010 is included for reference. Results have not been adjusted unless specifically stated as such.

Recent Business Highlights:

  • Posted revenue growth in every segment with significant growth in fitness and marine during first quarter.
  • Sold 2.5 million units in first quarter 2011, an 18% increase over first quarter 2010 driven by fitness and auto OEM.
  • Announced the opening of an office in the Detroit area to support both current and future automotive OEM customers.
  • Announced the GTN™ 650 and 750 – touchscreen, panel-mount avionics certified for installation in hundreds of makes and models of general aviation aircraft.
  • Announced the G2000™ - a premium flight deck for high performance piston aircraft featuring touchscreen controls and other features currently only available to the business jet market.
  • Announced the Forerunner® 610 – a touchscreen sports watch for those focused on training and improvement with our new Training Effect and Virtual Racer™.
  • Launched the dēzl™ navigator series – specifically designed to meet the needs of the over-the-road trucking industry with The National Truck and Trailer Services Breakdown Directory and fuel and mileage logging capabilities.

Executive overview from Dr. Min Kao, Chairman and Chief Executive Officer:

“The first quarter of 2011 provided strong revenue performance as each of our business segments contributed to 18% revenue growth,” said Dr. Min Kao, chairman and chief executive officer of Garmin Ltd. “We were pleased with the growth of our outdoor, fitness, aviation and marine segments which combined posted revenue growth of 16% and operating income growth of 10%. We continue to invest in these segments in order to capitalize on the numerous long-term growth initiatives in each of them.

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