This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “would”, “may”, “expects”, “estimates”, “plans”, “intends”, “projects”, and other words or phrases with similar meanings. Any statements regarding the Company’s GAAP and pro forma estimated earnings, EPS and revenue for fiscal 2016, the Company’s expected segment revenue growth rates, margins, currency movements, expenses, pricing, new products to be introduced in 2016 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 and uncertainties 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 26, 2015 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2015 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.
Garmin, the Garmin logo, the Garmin delta, Approach, fēnix and quatix are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S. Varia Vision, Garmin Drive, Garmin Nautix, Striker, GNX, PulsedLight, Garmin Elevate, TruSwing and Beat Yesterday are trademarks of, or exclusively licensed to, 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 | 52-Weeks Ended | ||||||||||||
| Dec 26, | Dec 27, | Dec 26, | Dec 27, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Net sales | $781,358 | $803,306 | $2,820,270 | $2,870,658 | |||||||||
| Cost of goods sold | 368,215 | 372,458 | 1,281,566 | 1,266,246 | |||||||||
| Gross profit | 413,143 | 430,848 | 1,538,704 | 1,604,412 | |||||||||
| Advertising expense | 56,814 | 54,175 | 167,166 | 146,633 | |||||||||
| Selling, general and administrative expense | 104,556 | 99,119 | 394,914 | 372,032 | |||||||||
| Research and development expense | 106,011 | 101,554 | 427,043 | 395,121 | |||||||||
| Total operating expense | 267,381 | 254,848 | 989,123 | 913,786 | |||||||||
| Operating income | 145,762 | 176,000 | 549,581 | 690,626 | |||||||||
| Other income: | |||||||||||||
| Interest income | 7,358 | 6,803 | 29,653 | 35,584 | |||||||||
| Foreign currency gains (losses) | (9,288 | ) | 15,967 | (23,465 | ) | (4,299 | ) | ||||||
| Other income | 8,711 | 1,126 | 11,418 | 1,834 | |||||||||
| Total other income | 6,781 | 23,896 | 17,606 | 33,119 | |||||||||
| Income before income taxes | 152,543 | 199,896 | 567,187 | 723,745 | |||||||||
| Income tax provision (benefit) | 20,160 | (10,349 | ) | 110,960 | 359,534 | ||||||||
| Net income | $132,383 | $210,245 | $456,227 | $364,211 | |||||||||
| Net income per share: | |||||||||||||
| Basic | $0.70 | $1.10 | $2.39 | $1.89 | |||||||||
| Diluted | $0.70 | $1.09 | $2.39 | $1.88 | |||||||||
| Weighted average common | |||||||||||||
| shares outstanding: | |||||||||||||
| Basic | 189,317 | 191,322 | 190,631 | 193,106 | |||||||||
| Diluted | 189,847 | 192,356 | 191,107 | 194,165 | |||||||||
| Dividends declared per share | $2.04 | $1.92 | |||||||||||
| Garmin Ltd. And Subsidiaries | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (In thousands, except per share information) | |||||||
| (Unaudited) | |||||||
| Dec 26, | Dec 27, | ||||||
| 2015 | 2014 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $833,070 | $1,196,268 | |||||
| Marketable securities | 215,161 | 167,989 | |||||
| Accounts receivable, net | 531,481 | 570,191 | |||||
| Inventories, net | 500,554 | 420,475 | |||||
| Deferred income taxes | - | 56,102 | |||||
| Deferred costs | 49,176 | 51,336 | |||||
| Prepaid expenses and other current assets | 81,645 | 48,615 | |||||
| Total current assets | 2,211,087 | 2,510,976 | |||||
| Property and equipment, net | 446,089 | 430,887 | |||||
| Marketable securities | 1,343,387 | 1,407,344 | |||||
| Restricted cash | 259 | 308 | |||||
| Noncurrent deferred income tax | 116,518 | 67,712 | |||||
| Noncurrent deferred costs | 38,769 | 36,140 | |||||
| Intangible assets, net | 245,552 | 218,083 | |||||
| Other assets | 97,730 | 21,853 | |||||
| Total assets | $4,499,391 | $4,693,303 | |||||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $178,905 | $149,094 | |||||
| Salaries and benefits payable | 70,601 | 62,764 | |||||
| Accrued warranty costs | 30,449 | 27,609 | |||||
| Accrued sales program costs | 67,613 | 58,934 | |||||
| Deferred revenue | 164,982 | 203,598 | |||||
| Accrued royalty costs | 30,310 | 51,889 | |||||
| Accrued advertising expense | 33,547 | 26,334 | |||||
| Other accrued expenses | 74,926 | 67,780 | |||||
| Deferred income taxes | - | 17,673 | |||||
| Income taxes payable | 21,674 | 182,260 | |||||
| Dividend payable | 192,991 | 185,326 | |||||
| Total current liabilities | 865,998 | 1,033,261 | |||||
| Deferred income taxes | 56,210 | 39,497 | |||||
| Non-current income taxes | 101,689 | 80,611 | |||||
| Non-current deferred revenue | 128,731 | 135,130 | |||||
| Other liabilities | 1,637 | 1,437 | |||||
| Stockholders' equity: | |||||||
| Shares, CHF 10 par value, 208,077 shares authorized and issued; | |||||||
| 189,722 shares outstanding at December 26, 2015 | |||||||
| and 191,815 shares outstanding at December 27, 2014 | 1,797,435 | 1,797,435 | |||||
| Additional paid-in capital | 62,239 | 73,521 | |||||
| Treasury stock | (414,637 | ) | (330,132 | ) | |||
| Retained earnings | 1,930,517 | 1,859,972 | |||||
| Accumulated other comprehensive income | (30,428 | ) | 2,571 | ||||
| Total stockholders' equity | 3,345,126 | 3,403,367 | |||||
| Total liabilities and stockholders' equity | 4,499,391 | $4,693,303 | |||||
| Garmin Ltd. And Subsidiaries | ||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| (In thousands) | ||||||||
| 52-Weeks Ended | ||||||||
| Dec 26, | Dec 27, | |||||||
| 2015 | 2014 | |||||||
| Operating Activities: | ||||||||
| Net income | $456,227 | $364,211 | ||||||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation | 51,311 | 48,433 | ||||||
| Amortization | 27,049 | 28,582 | ||||||
| Gain on sale of property and equipment | (198 | ) | (306 | ) | ||||
| Provision for doubtful accounts | (2,521 | ) | 66 | |||||
| Deferred income taxes | 5,897 | 89,828 | ||||||
| Unrealized foreign currency loss | 37,931 | 573 | ||||||
| Provision for obsolete and slow moving inventories | 23,257 | 25,903 | ||||||
| Stock compensation expense | 26,290 | 24,293 | ||||||
| Realized gain on marketable securities | (55 | ) | (505 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 22,473 | (27,398 | ) | |||||
| Inventories | (121,718 | ) | (76,491 | ) | ||||
| Other current and non-current assets | (107,360 | ) | 627 | |||||
| Accounts payable | 36,079 | 8,981 | ||||||
| Other current and non-current liabilities | 20,742 | 16,467 | ||||||
| Deferred revenue | (43,338 | ) | (87,543 | ) | ||||
| Deferred cost | (585 | ) | 11,029 | |||||
| Income taxes payable | (151,014 | ) | 95,961 | |||||
| Net cash provided by operating activities | 280,467 | 522,711 | ||||||
| Investing activities: | ||||||||
| Purchases of property and equipment | (80,592 | ) | (73,339 | ) | ||||
| Proceeds from sale of property and equipment | 7,921 | 748 | ||||||
| Purchase of intangible assets | (3,889 | ) | (4,720 | ) | ||||
| Purchase of marketable securities | (915,921 | ) | (1,006,482 | ) | ||||
| Redemption of marketable securities | 919,141 | 1,096,676 | ||||||
| Proceeds from repayment on loan receivable | - | 137,379 | ||||||
| Change in restricted cash | 48 | (59 | ) | |||||
| Acquisitions, net of cash acquired | (38,687 | ) | (18,871 | ) | ||||
| Net cash provided by/(used in) investing activities | (111,979 | ) | 131,332 | |||||
| Financing activities: | ||||||||
| Dividends paid | (378,117 | ) | (360,075 | ) | ||||
| Purchase of treasury stock under share repurchase plan | (131,413 | ) | (241,578 | ) | ||||
| Purchase of treasury stock related to equity awards | (5,586 | ) | (18,638 | ) | ||||
| Proceeds from issuance of treasury stock related to equity awards | 17,073 | 20,753 | ||||||
| Tax benefit from issuance of equity awards | (2,049 | ) | (84 | ) | ||||
| Net cash used in financing activities | (500,092 | ) | (599,622 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (31,594 | ) | (37,302 | ) | ||||
| Net increase/(decrease) in cash and cash equivalents | (363,198 | ) | 17,119 | |||||
| Cash and cash equivalents at beginning of period | 1,196,268 | 1,179,149 | ||||||
| Cash and cash equivalents at end of period | $833,070 | $1,196,268 | ||||||
| Garmin Ltd. And Subsidiaries | |||||||||||||||||||
| Net Sales, Gross Profit, and Operating Income/(Loss) by Segment (Unaudited) | |||||||||||||||||||
| Reporting Segments | |||||||||||||||||||
| Outdoor | Fitness | Marine | Auto | Aviation | Total | ||||||||||||||
| 13-Weeks Ended December 26, 2015 | |||||||||||||||||||
| Net sales | $123,627 | $228,740 | $56,454 | $268,478 | $104,059 | $781,358 | |||||||||||||
| Gross profit | $74,549 | $117,344 | $30,289 | $112,061 | $78,900 | $413,143 | |||||||||||||
| Operating income/(loss) | $41,189 | $40,288 | ($5,593 | ) | $35,928 | $33,950 | $145,762 | ||||||||||||
| 13-Weeks Ended December 27, 2014 | |||||||||||||||||||
| Net sales | $116,432 | $201,303 | $52,460 | $339,832 | $93,279 | $803,306 | |||||||||||||
| Gross profit | $71,745 | $122,083 | $24,612 | $147,073 | $65,335 | $430,848 | |||||||||||||
| Operating income/(loss) | $40,709 | $57,629 | ($687 | ) | $57,431 | $20,918 | $176,000 | ||||||||||||
| 52-Weeks Ended December 26, 2015 | |||||||||||||||||||
| Net sales | $425,150 | $661,599 | $286,778 | $1,048,125 | $398,618 | $2,820,270 | |||||||||||||
| Gross profit | $259,889 | $366,139 | $158,493 | $459,469 | $294,714 | $1,538,704 | |||||||||||||
| Operating income | $140,200 | $134,574 | $28,611 | $134,939 | $111,257 | $549,581 | |||||||||||||
| 52-Weeks Ended December 27, 2014 | |||||||||||||||||||
| Net sales | $427,555 | $568,440 | $248,371 | $1,240,377 | $385,915 | $2,870,658 | |||||||||||||
| Gross profit | $266,550 | $358,287 | $129,710 | $569,452 | $280,413 | $1,604,412 | |||||||||||||
| Operating income | $151,055 | $190,682 | $26,232 | $215,679 | $106,978 | $690,626 | |||||||||||||
| Garmin Ltd. And Subsidiaries | |||||||||||||||
| Net Sales by Geography (Unaudited) | |||||||||||||||
| 13-Weeks Ended | 52-Weeks Ended | ||||||||||||||
| Dec 26, | Dec 27, | Yr over Yr | Dec 26, | Dec 27, | Yr over Yr | ||||||||||
| 2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||
| Net sales | $781,358 | $803,306 | -3% | $2,820,270 | $2,870,658 | -2% | |||||||||
| Americas | 412,581 | 448,055 | -8% | 1,469,243 | 1,538,322 | -4% | |||||||||
| EMEA | 268,787 | 272,384 | -1% | 1,013,139 | 1,054,244 | -4% | |||||||||
| APAC | 99,990 | 82,867 | 21% | 337,888 | 278,092 | 22% | |||||||||
| EMEA - Europe, Middle East and Africa; APAC - Asia Pacific | |||||||||||||||
