Garmin reports second quarter revenue and earnings growth;

Garmin reports second quarter revenue and earnings growth; Raises guidance for 2018

Revenue Standard Adoption

We adopted the new revenue standard in the first quarter of 2018. The prior periods presented have been restated to reflect adoption of this new standard.

Webcast Information/Forward-Looking Statements:

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

			When:		Wednesday, August 1, 2018 at 10:30 a.m. Eastern
			Where:		http://www.garmin.com/en-US/company/investors/events/
			How:		Simply log on to the web at the address above or call to listen in at 855-757-3897

An archive of the live webcast will be available until July 31, 2019 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 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 effective tax rate, and the Company’s expected segment revenue growth rates, consolidated revenue, gross margins, operating margins, currency movements, expenses, pricing, new products to be introduced in 2018, statements relating to possible future dividends 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 30, 2017 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2017 Form 10-K can be downloaded from https://www.garmin.com/en-US/company/investors/sec/form-10-K/.

Non-GAAP Financial Measures

This release and the attachments contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the Company's use of these measures are included in the attachments.

Garmin, the Garmin logo, the Garmin delta, vívoactive, Edge, Navionics, fēnix and inReach are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S.; Garmin Pay, GFC, G3000H, Panoptix LiveScope and Varia 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				26-Weeks Ended
	June 30,		July 1,		June 30,		July 1,
	2018		2017		2018		2017
Net sales	$	894,452	$	831,486	$	1,605,325	$	1,472,996

Cost of goods sold		371,182		347,356		655,520		616,060

Gross profit		523,270		484,130		949,805		856,936

Advertising expense		43,549		42,009		68,861		73,533
Selling, general and administrative expense		120,500		105,251		237,564		207,303
Research and development expense		141,713		127,248		283,670		249,450
Total operating expense		305,762		274,508		590,095		530,286

Operating income		217,508		209,622		359,710		326,650

Other income (expense):
Interest income		10,995		9,281		21,222		17,724
Foreign currency gains (losses)		2,647		15,110		3,463		(22,387	)
Other income		4,918		314		5,653		715
Total other income (expense)		18,560		24,705		30,338		(3,948	)

Income before income taxes		236,068		234,327		390,048		322,702

Income tax provision (benefit)		45,726		57,348		70,333		(92,680	)

Net income	$	190,342	$	176,979	$	319,715	$	415,382

Net income per share:
Basic	$	1.01	$	0.94	$	1.70	$	2.21
Diluted	$	1.00	$	0.94	$	1.69	$	2.20

Weighted average common
shares outstanding:
Basic		188,542		187,757		188,432		187,974
Diluted		189,461		188,492		189,377		188,691

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

	June 30,			December 30,
	2018			2017
Assets
Current assets:
Cash and cash equivalents	$	946,656		$	891,488
Marketable securities		173,318			161,687
Accounts receivable, net		533,076			590,882
Inventories		501,490			517,644
Deferred costs		31,924			30,525
Prepaid expenses and other current assets		137,118			153,912
Total current assets		2,323,582			2,346,138

Property and equipment, net		637,245			595,684

Restricted cash		211			271
Marketable securities		1,302,447			1,260,033
Deferred income taxes		188,101			195,981
Noncurrent deferred costs		30,663			33,029
Intangible assets, net		409,459			409,801
Other assets		97,012			107,352
Total assets	$	4,988,720		$	4,948,289

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	166,499		$	169,640
Salaries and benefits payable		95,969			102,802
Accrued warranty costs		38,429			36,827
Accrued sales program costs		65,477			93,250
Deferred revenue		98,526			103,140
Accrued royalty costs		28,209			32,204
Accrued advertising expense		29,059			30,987
Other accrued expenses		66,776			93,652
Income taxes payable		40,016			33,638
Dividend payable		300,187			95,975
Total current liabilities		929,147			792,115

Deferred income taxes		74,092			76,612
Noncurrent income taxes		140,584			138,295
Noncurrent deferred revenue		84,156			87,060
Other liabilities		1,860			1,788

Stockholders' equity:
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 188,797 shares
outstanding at June 30, 2018 and 188,189 shares outstanding at December 30, 2017		17,979			17,979
Additional paid-in capital		1,828,515			1,828,386
Treasury stock		(433,959	)		(468,818	)
Retained earnings		2,336,614			2,418,444
Accumulated other comprehensive income		9,732			56,428
Total stockholders' equity		3,758,881			3,852,419
Total liabilities and stockholders' equity	$	4,988,720		$	4,948,289

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

		26-Weeks Ended
		June 30,			July 1,
		2018			2017
Operating activities:
Net income		$	319,715		$	415,382
Adjustments to reconcile net income to net cash
provided by operating activities:
	Depreciation		31,800			29,558
	Amortization		16,420			13,273
	Gain on sale or disposal of property and equipment		(1,042	)		(56	)
	Provision for doubtful accounts		616			351
	Provision for obsolete and slow moving inventories		11,725			11,072
	Unrealized foreign currency loss		2,401			26,325
	Deferred income taxes		11,000			(159,384	)
	Stock compensation expense		27,747			20,385
	Realized losses on marketable securities		231			584
Changes in operating assets and liabilities, net of acquisitions:
	Accounts receivable		48,099			23,785
	Inventories		(4,666	)		(34,621	)
	Other current and non-current assets		(4,841	)		(6,328	)
	Accounts payable		1,618			(20,942	)
	Other current and non-current liabilities		(49,237	)		(48,162	)
	Deferred revenue		(7,483	)		(15,637	)
	Deferred costs		962			2,890
	Income taxes payable		32,998			5,352
Net cash provided by operating activities			438,063			263,827

Investing activities:
Purchases of property and equipment			(93,072	)		(39,812	)
Proceeds from sale of property and equipment			1,282			121
Purchase of intangible assets			(2,452	)		(6,336	)
Purchase of marketable securities			(209,387	)		(243,880	)
Redemption of marketable securities			127,152			278,719
Acquisitions, net of cash acquired			(9,417	)		(7,500	)
Net cash used in investing activities			(185,894	)		(18,688	)

Financing activities:
Dividends			(196,086	)		(191,691	)
Proceeds from issuance of treasury stock related to equity awards			14,142			10,316
Purchase of treasury stock related to equity awards			(6,900	)		(3,582	)
Purchase of treasury stock under share repurchase plan			-			(63,957	)
Net cash used in financing activities			(188,844	)		(248,914	)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(8,217	)		16,456

Net increase in cash, cash equivalents, and restricted cash			55,108			12,681
Cash, cash equivalents, and restricted cash at beginning of period			891,759			846,996
Cash, cash equivalents, and restricted cash at end of period		$	946,867		$	859,677

Garmin Ltd. And Subsidiaries
Net Sales, Gross Profit and Operating Income by Segment (Unaudited)
(in thousands)

	Reportable Segments

	Outdoor		Fitness		Marine		Auto		Aviation		Total

13-Weeks Ended June 30, 2018

Net sales	$	201,640	$	225,095	$	134,583	$	180,128	$	153,006	$	894,452
Gross profit		128,872		126,431		78,785		75,452		113,730		523,270
Operating income		71,916		52,548		27,768		12,612		52,664		217,508

13-Weeks Ended July 1, 2017

Net sales	$	194,776	$	181,022	$	108,545	$	223,083	$	124,060	$	831,486
Gross profit		127,813		102,139		62,368		99,309		92,501		484,130
Operating income		74,284		37,487		24,295		34,198		39,358		209,622

Garmin Ltd. And Subsidiaries
Net Sales by Geography (Unaudited)
(In thousands)

	13-Weeks Ended						26-Weeks Ended
	June 30,		July 1,		Yr over Yr		June 30,		July 1,		Yr over Yr
	2018		2017		Change		2018		2017		Change
Net sales	$	894,452	$	831,486	8	%	$	1,605,325	$	1,472,996	9	%
Americas		437,116		401,409	9	%		783,091		726,038	8	%
EMEA		309,116		314,649	-2	%		555,029		539,984	3	%
APAC		148,220		115,428	28	%		267,205		206,974	29	%

EMEA - Europe, Middle East and Africa; APAC - Asia Pacific and Australian Continent

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