Garmin Reports EPS Growth in First Quarter 2014 with Strong

Garmin Reports EPS Growth in First Quarter 2014 with Strong Revenue and Margins

As announced in February, the Board will recommend to the shareholders for approval at the annual meeting to be held on June 6, 2014 a cash dividend in the amount of $1.92 per share (subject to possible adjustment based on the total amount of the dividend in Swiss Francs as approved at the annual meeting) payable in quarterly installments.

2014 Guidance:

While results in first quarter exceeded our expectations, it is historically the seasonally weakest quarter of the year and much of the year still lies in front of us. Due to these factors, we will update guidance following second quarter as has been our past practice.

Webcast Information/Forward-Looking Statements:

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

		When:		Wednesday, April 30, 2014 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 800-274-0251

An archive of the live webcast will be available until June 25, 2014 on the Garmin website at 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 2014, the Company’s expected segment revenue growth rate, margins, new products to be introduced in 2014 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 28, 2013 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2013 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

Garmin, Tri-Tronics, Forerunner and Edge are registered trademarks and G3X, fēnix, VIRB and vivofit 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 Statements of Income (Unaudited)
(In thousands, except per share information)

	13-Weeks Ended
	March 29,			March 30,
		2014			2013
Net sales	$	583,221		$	531,957

Cost of goods sold		252,387			255,824

Gross profit		330,834			276,133

Advertising expense		24,428			22,249
Selling, general and administrative expense		89,873			86,269
Research and development expense		96,164			87,689
Total operating expense		210,465			196,207

Operating income		120,369			79,926

Other income (expense):
Interest income		9,768			8,898
Foreign currency gains (losses)		12,814			(8,348	)
Other		(484	)		1,158
Total other income (expense)		22,098			1,708

Income before income taxes		142,467			81,634

Income tax provision (benefit):		23,649			(7,032	)

Net income	$	118,818		$	88,666

Net income per share:
Basic	$	0.61		$	0.45
Diluted	$	0.61		$	0.45

Weighted average common
shares outstanding:
Basic		195,090			195,630
Diluted		195,860			196,457


Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)

	(Unaudited)
	March 29,			December 28,
		2014			2013
Assets
Current assets:
Cash and cash equivalents	$	1,136,691		$	1,179,149
Marketable securities		163,660			149,862
Accounts receivable, net		427,457			564,586
Inventories, net		442,025			382,226
Deferred income taxes		67,792			69,823
Deferred costs		52,009			57,368
Loan receivable		42,862			137,379
Prepaid expenses and other current assets		54,999			55,243
Total current assets		2,387,495			2,595,636

Property and equipment, net		417,164			414,848

Marketable securities		1,571,166			1,502,106
Restricted cash		246			249
Noncurrent deferred income tax		87,524			88,324
Noncurrent deferred costs		38,384			41,157
Other intangible assets, net		216,260			219,494
Other assets		20,675			17,789
Total assets	$	4,738,914		$	4,879,603

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	124,241		$	146,582
Salaries and benefits payable		58,166			59,794
Accrued warranty costs		25,016			26,767
Accrued sales program costs		31,245			50,903
Deferred revenue		238,285			256,908
Accrued royalty costs		7,901			64,538
Accrued advertising expense		12,643			19,448
Other accrued expenses		73,911			65,657
Deferred income taxes		1,974			989
Income taxes payable		36,009			38,043
Dividend payable		87,717			175,675
Total current liabilities		697,108			905,304

Deferred income taxes		1,750			1,758
Non-current income taxes		141,723			140,933
Non-current deferred revenue		144,664			171,012
Other liabilities		1,299			890

Stockholders' equity:
Shares, CHF 10 par value, 208,077,418 shares authorized and issued;
194,773,186 shares outstanding at March 29, 2014
and 195,150,102 shares outstanding at December 28, 2013		1,797,435			1,797,435
Additional paid-in capital		80,837			79,263
Treasury stock		(145,609	)		(120,620	)
Retained earnings		1,984,405			1,865,587
Accumulated other comprehensive income		35,302			38,041
Total stockholders' equity		3,752,370			3,659,706
Total liabilities and stockholders' equity	$	4,738,914		$	4,879,603


Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

		13-Weeks Ended
		March 29,			March 30,
			2014			2013
Operating Activities:
Net income		$	118,818		$	88,666
Adjustments to reconcile net income to net cash
provided by operating activities:
	Depreciation		11,672			12,619
	Amortization		6,740			8,271
	(Gain) loss on sale of property and equipment		(617	)		36
	Provision for doubtful accounts		(189	)		727
	Deferred income taxes		5,942			1,493
	Unrealized foreign currency gains		(15,334	)		(495	)
	Provision for obsolete and slow moving inventories		3,384			6,033
	Stock compensation expense		6,325			5,438
	Realized loss (gain) on marketable securities		1,544			(1,073	)
Changes in operating assets and liabilities:
	Accounts receivable		137,198			152,307
	Inventories		(64,083	)		(13,608	)
	Other current and non-current assets		(1,591	)		(49,321	)
	Accounts payable		(20,411	)		(18,377	)
	Other current and non-current liabilities		(80,011	)		(100,784	)
	Deferred revenue		(45,290	)		(23,329	)
	Deferred cost		8,129			4,813
	Income taxes payable		(1,053	)		(14,053	)
Net cash provided by operating activities			71,173			59,363

Investing activities:
Purchases of property and equipment			(15,537	)		(11,616	)
Proceeds from sale of property and equipment			609			12
Purchase of intangible assets			(1,111	)		(347	)
Purchase of marketable securities			(298,695	)		(258,604	)
Redemption of marketable securities			223,786			270,925
Proceeds from repayment (advances) on loan receivable			94,507			(18,324	)
Change in restricted cash			3			(1	)
Net cash provided by (used in) investing activities			3,562			(17,955	)

Financing activities:
Dividends paid			(87,853	)		(175,956	)
Purchase of treasury stock under share repurchase plan			(32,986	)		-
Purchase of treasury stock related to equity awards			(58	)		(62	)
Proceeds from issuance of treasury stock related to equity awards			1,107			1,474
Tax benefit from issuance of equity awards			2,199			258
Net cash used in financing activities			(117,591	)		(174,286	)

Effect of exchange rate changes on cash and cash equivalents			398			(4,862	)

Net decrease in cash and cash equivalents			(42,458	)		(137,740	)
Cash and cash equivalents at beginning of period			1,179,149			1,231,180
Cash and cash equivalents at end of period		$	1,136,691		$	1,093,440


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 Mar 29, 2014

Net sales	$83,985	$100,288	$60,002	$242,952	$95,994	$583,221
Gross profit	$50,910	$64,085	$31,053	$113,791	$70,995	$330,834
Operating income	$23,683	$33,512	$3,810	$30,564	$28,800	$120,369

13-Weeks Ended Mar 30, 2013

Net sales	$76,165	$72,437	$50,296	$252,589	$80,470	$531,957
Gross profit	$44,475	$44,968	$23,347	$107,120	$56,223	$276,133
Operating income/(loss)	$21,588	$19,892	($2,440)	$20,032	$20,854	$79,926


Garmin Ltd. And Subsidiaries
Revenue by Geography (Unaudited)

	13-Weeks Ended
	Mar 29,	Mar 30,	Yr over Yr
	2014	2013	Change
Net sales	$583,221	$531,957	10%
Americas	304,808	285,813	7%
EMEA	220,603	190,775	16%
APAC	57,810	55,369	4%

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