Garmin Reports Third Quarter 2011 Results with Strong EPS and Cash Flow; Increasing 2011 Guidance

Earnings Call Information

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

When:     Wednesday, November 2, 2011 at 10:30 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 888-378-4353.
Contact:

Email Contact

 

An archive of the live webcast will be available until December 7, 2011 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 2011, the Company’s expected segment revenue growth rate, margins, new products to be introduced in 2011 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 25, 2010 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2010 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, fitness, marine, aviation, and OEM applications. Garmin Ltd. is incorporated in Switzerland, and its principal subsidiaries are located in the United States, Taiwan and the United Kingdom. For more information, visit Garmin's virtual newsroom at www.garmin.com/newsroom or contact the Media Relations department at 913-397-8200.

Garmin, nüvi, Edge, aera, Approach, Astro, eTrex, GPSMAP and Forerunner are registered trademarks, and Vector and Montana 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)      
Sept 24, December 25,
2011       2010
Assets
Current assets:
Cash and cash equivalents $1,389,406 $1,260,936
Marketable securities 72,784 24,418
Accounts receivable, net 519,226 747,249
Inventories, net 461,304 387,577
Deferred income taxes 26,297 33,628
Deferred costs 31,780 20,053
Prepaid expenses and other current assets 53,117   24,894  
Total current assets 2,553,914 2,498,755
 
Property and equipment, net 423,041 427,805
 
Marketable securities 983,563 777,401
Restricted cash 1,399 1,277
Licensing agreements, net 7,603 1,800
Noncurrent deferred income tax 73,613 73,613
Noncurrent deferred costs 36,134 24,685
Other intangible assets, net 255,618   183,352  
Total assets $4,334,885   $3,988,688  
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $182,651 $132,348
Salaries and benefits payable 46,591 49,288
Accrued warranty costs 43,473 49,885
Accrued sales program costs 44,549 107,261
Deferred revenue 139,528 89,711
Accrued royalty costs 77,907 95,086
Accrued advertising expense 24,595 21,587
Other accrued expenses 97,081 63,043
Deferred income taxes 4,645 4,800
Income taxes payable 20,163 56,028
Dividend payable 232,889   0  
Total current liabilities 914,072 669,037
 
Deferred income taxes 12,199 6,986
Non-current income taxes 165,545 153,621
Non-current deferred revenue 173,355 108,076
Other liabilities 1,522 1,406
 
Stockholders' equity:
Shares, CHF 10 par value, 208,077,418 shares authorized and issued;
194,171,773 shares outstanding at September 24, 2011;
and 194,358,038 shares outstanding at December 25, 2010; 1,797,435 1,797,435
Additional paid-in capital 61,309 38,268
Treasury stock (113,681 ) (106,758 )
Retained earnings 1,248,443 1,264,613
Accumulated other comprehensive income 74,686   56,004  
Total stockholders' equity 3,068,192   3,049,562  
Total liabilities and stockholders' equity $4,334,885   $3,988,688  
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
                       
13-Weeks Ended 39-Weeks Ended
Sept 24, Sept 25, Sept 24, Sept 25,
2011 2010 2011 2010
Net sales $ 666,993 $ 692,364 $ 1,848,925 $ 1,852,196
 
Cost of goods sold   322,662   348,344     944,120   885,615  
 
Gross profit 344,331 344,020 904,805 966,581
 
Advertising expense 35,310 41,002 89,364 100,843
Selling, general and administrative expense 88,751 66,869 247,833 208,379
Research and development expense   72,936   69,512     213,930   205,332  
Total operating expense   196,997   177,383     551,127   514,554  
 
Operating income 147,334 166,637 353,678 452,027
 
Other income (expense):
Interest income 8,464 5,695 23,318 18,364
Foreign currency gains (losses) 14,893 35,527 12,422 (54,614 )
Other   4,345   3,057     9,616   5,071  
Total other income (expense)   27,702   44,279     45,356   (31,179 )
 
Income before income taxes 175,036 210,916 399,034 420,848
 
Income tax provision/(benefit)   24,655   (68,636 )   43,694   (30,848 )
 
Net income $ 150,381 $ 279,552   $ 355,340 $ 451,696  
 
Net income per share:
Basic $ 0.77 $ 1.44 $ 1.83 $ 2.28
Diluted $ 0.77 $ 1.43 $ 1.82 $ 2.27
 
Weighted average common
shares outstanding:
Basic 194,112 194,482 194,028 197,785
Diluted 194,828 195,305 194,809 198,891
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
    39-Weeks Ended
Sept 24,       Sept 25,
2011 2010
Operating Activities:
Net income $355,340 $451,696
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 40,558 39,755
Amortization 19,772 32,471
Loss (gain) on sale of property and equipment (2,407 ) 34
Provision for doubtful accounts 6,227 (3,104 )
Deferred income taxes 12,429 260
Unrealized foreign currency losses/(gains) (5,366 ) 38,635
Provision for obsolete and slow moving inventories 2,590 14,406
Stock compensation expense 27,258 29,412
Realized losses/(gains) on marketable securities (5,633 ) 1,022
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 256,656 351,225
Inventories (58,655 ) (196,270 )
Other current assets (36,713 ) 24,495
Accounts payable (5,603 ) (13,051 )
Other current and non-current liabilities (72,349 ) (261,132 )
Deferred revenue 115,096 65,552
Deferred cost (23,175 ) (10,531 )
Income taxes payable (21,987 ) 24,383
License fees (6,562 ) (3,043 )
Net cash provided by operating activities 597,476 586,215
 
Investing activities:
Purchases of property and equipment (26,523 ) (22,983 )
Purchase of intangible assets (8,611 ) (7,891 )
Purchase of marketable securities (835,965 ) (413,312 )
Redemption of marketable securities 599,740 534,500
Change in restricted cash (122 ) 1,091
Acquisitions, net of cash acquired (52,688 ) -  
Net cash (used in)/provided by investing activities (324,169 ) 91,405
 
Financing activities:
Proceeds from issuance of common stock through
stock purchase and stock option plans 5,619 6,369
Taxes paid related to net share settlement of equity awards (375 ) -
Stock repurchase - (223,378 )
Dividends (154,835 ) (299,103 )
Tax benefit related to stock option exercise 1,542   2,377  
Net cash used in financing activities (148,049 ) (513,735 )
 
Effect of exchange rate changes on cash and cash equivalents 3,212 (19,501 )
   
Net increase in cash and cash equivalents 128,470 144,384
Cash and cash equivalents at beginning of period 1,260,936   1,091,581  
Cash and cash equivalents at end of period $1,389,406   $1,235,965  
 
Garmin Ltd. And Subsidiaries
Revenue, Gross Profit, and Operating Income by Segment (Unaudited)
                       
Reporting Segments
Auto/
Outdoor Fitness Marine Mobile Aviation Total
 

13-Weeks Ended September 24, 2011

 
Net sales $94,720 $69,030 $48,055 $384,150 $71,038 $666,993
Gross profit $62,387 $41,476 $26,378 $166,941 $47,149 $344,331
Operating income $41,331 $20,452 $9,870 $56,215 $19,466 $147,334
 
13-Weeks Ended September 25, 2010
 
Net sales $90,329 $53,656 $46,086 $441,891 $60,402 $692,364
Gross profit $62,347 $32,172 $27,765 $179,270 $42,466 $344,020
Operating income $48,230 $19,928 $15,618 $66,588 $16,273 $166,637
                                     
 
39-Weeks Ended September 24, 2011
 
Net sales $242,178 $203,411 $178,479 $1,011,405 $213,452 $1,848,925
Gross profit $156,689 $120,770 $103,784 $378,280 $145,282 $904,805
Operating income $101,805 $61,293 $48,360 $83,087 $59,133 $353,678
 
39-Weeks Ended September 25, 2010
 
Net sales $229,562 $159,475 $161,710 $1,110,040 $191,409 $1,852,196
Gross profit $154,115 $97,728 $101,103 $479,381 $134,254 $966,581
Operating income $110,634 $58,851 $56,694 $172,117 $53,731 $452,027

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