Garmin Reports First Quarter 2012 Results with Revenue and Pro Forma EPS Growth

SCHAFFHAUSEN, Switzerland — (BUSINESS WIRE) — May 2, 2012 — Garmin Ltd. (Nasdaq: GRMN) today announced results for the fiscal quarter ended March 31, 2012.

First Quarter 2012 Financial Summary:

  • Total revenue of $557 million, up 10% from $508 million in first quarter 2011
    • Automotive/Mobile segment revenue increased 6% to $280 million
    • Outdoor segment revenue increased 16% to $77 million
    • Fitness segment revenue increased 26% to $71 million
    • Marine segment revenue increased 9% to $56 million
    • Aviation segment revenue increased 5% to $73 million
  • All geographies posted revenue growth:
    • North America revenue was $296 million compared to $280 million, up 6%
    • Europe revenue was $199 million compared to $171 million, up 16%
    • Asia revenue was $62 million compared to $57 million, up 8%
  • Gross margin improved both sequentially and year-over-year to 51% for first quarter 2012 from 48% in fourth quarter 2011 and 47% in first quarter 2011
  • Operating margin increased year-over-year to 16%, compared to 15% in first quarter 2011
  • Effective tax rate increased to 12.8% in first quarter of 2012 compared to 1.5% in first quarter 2011
  • Diluted earnings per share (EPS) decreased to $0.44 from $0.49 in first quarter 2011 due to the increased effective tax rate; pro forma diluted EPS increased 5% to $0.45 from $0.43 in the same quarter in 2011 (Pro forma earnings per share excludes the impact of foreign currency transaction gain or loss)
  • Generated $116 million of free cash flow in first quarter 2012

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. A table outlining the impact of this net deferral in both 2012 and 2011 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 outdoor during first quarter.
  • Sold 2.7 million units in first quarter 2012, a 7% increase over first quarter 2011.
  • Announced our first factory-installed auto OEM relationship with Suzuki, providing infotainment systems to many of their 2013 models.
  • Delivered the Forerunner® 910XT, our much anticipated second generation triathlon-focused watch.
  • Supported the successful first flight of the Cessna M2 including the G3000 cockpit, which is slated to begin deliveries in the second half of 2013.
  • Announced marine OEM relationships with Teleflex and Viking at the 2012 Miami International Boat Show.
  • Launched the Approach® S3, a touchscreen GPS golf watch, providing a premium wristwatch solution for golfers with integrated digital scorecard.

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

“The first quarter of 2012 provided strong revenue performance as each of our business segments contributed to 10% revenue growth,” said Dr. Min Kao, chairman and chief executive officer of Garmin Ltd. “This is a great way to start the year; yet, we remain cautious regarding the PND industry as much of our strength was related to global market share gains. The revenue growth of our core business segments of outdoor, fitness, aviation and marine was 14%, highlighting the continued diversification in our business model. We continue to grow our research and development investment in these segments, as well as auto OEM, in order to capitalize on the numerous long-term growth initiatives in each of them.

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