Switzerland
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0-31983
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98-0229227
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(State or other
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(Commission
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(I.R.S. Employer
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jurisdiction
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File Number)
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Identification No.)
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of incorporation)
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(a)
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Not applicable.
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(b)
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Not applicable.
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(c)
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Not applicable.
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(d)
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Exhibits. The following exhibits are furnished herewith.
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Exhibit No.
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Description
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99.1
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Press Release dated August 3, 2011 (furnished pursuant to Item 2.02).
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GARMIN LTD.
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|
Date: August 3, 2011
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/s/ Joshua H. Maxfield
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Joshua H. Maxfield
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Assistant Corporate Secretary
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Exhibit No.
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Description
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|
99.1
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|
Press Release dated August 3, 2011
|
INVESTOR CONTACT:
|
MEDIA CONTACT:
|
Kerri Thurston
|
Ted Gartner
|
Phone | 913/397-8200
|
Phone | 913/397-8200
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E-Mail | investor.relations@garmin.com
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E-Mail | media.relations@garmin.com
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·
|
Total revenue of $674 million, down 8% from $729 million in second quarter 2010 with four segments posting growth:
|
|
·
|
Automotive/Mobile segment revenue decreased 19% to $363 million
|
|
·
|
Outdoor segment revenue increased 1% to $81 million
|
|
·
|
Fitness segment revenue increased 25% to $78 million
|
|
·
|
Aviation segment revenue increased 13% to $73 million
|
|
·
|
Marine segment revenue increased 6% to $79 million
|
·
|
Geographically, both Europe and Asia contributed growth in second quarter 2011:
|
|
·
|
North America revenue was $358 million compared to $455 million, down 21%
|
|
·
|
Europe revenue was $253 million compared to $226 million, up 12%
|
|
·
|
Asia revenue was $63 million compared to $48 million, up 31%
|
·
|
Units shipped decreased 6% year-over-year to 3.8 million units
|
·
|
Gross margin improved sequentially and decreased year-over-year to 48% in the current quarter compared to 47% in first quarter 2011 and 54% in second quarter 2010
|
·
|
Operating margin declined on a year-over-year basis to 20% compared to 28% in second quarter 2010 but improved sequentially from 15% in first quarter of 2011
|
·
|
Diluted earnings per share (EPS) decreased 16% to $0.56 from $0.67 in second quarter 2010; pro forma diluted EPS decreased 26% to $0.63 from $0.85 in the same quarter in 2010. (Pro forma EPS excludes the impact of foreign currency transaction gain or loss.)
|
·
|
Free cash flow generation of $196 million in second quarter 2011
|
·
|
Total revenue of $1.18 billion, up 2% from $1.16 billion year-to-date 2010
|
|
·
|
Automotive/Mobile segment revenue decreased 6% to $627 million
|
|
·
|
Outdoor segment revenue increased 6% to $147 million
|
|
·
|
Fitness segment revenue increased 27% to $134 million
|
|
·
|
Aviation segment revenue increased 9% to $142 million
|
|
·
|
Marine segment revenue increased 13% to $130 million
|
·
|
Europe and Asia contributed revenue growth while North America declined:
|
|
·
|
North America revenue was $638 million compared to $709 million, down 10%
|
|
·
|
Europe revenue was $424 million compared to $360 million, up 18%
|
|
·
|
Asia revenue was $120 million compared to $91 million, up 32%
|
·
|
Units shipped increased 2% year-over-year to 6.3 million units
|
·
|
Gross margin decreased to 47% in 2011 compared to 54% in 2010
|
·
|
Operating margin decreased on a year-over-year basis to 17% compared to 25% in 2010
|
·
|
Diluted EPS increased 22% to $1.05 from $0.86 in year-to-date 2010; pro forma diluted EPS decreased 14% to $1.06 from $1.23 in year-to-date 2010 (Pro forma EPS excludes the impact of foreign currency transaction gain or loss.)
|
·
|
Free cash flow generation of $397 million year-to-date
|
·
|
Sold 3.8 million units in the second quarter of 2011, with unit growth in both Europe and Asia.
|
·
|
Maintained strong PND market share position in North America and grew market share across Europe.
|
·
|
Delivered our new fitness device - the Forerunner® 610 fitness watch which has been met with strong demand and exceptional reviews.
|
·
|
Received shareholder approval for payment of a quarterly dividend with the first installment paid on June 30.
|
·
|
Acquired Navigon® AG, a privately held PND and OEM solution provider based in Hamburg Germany.
|
·
|
Acquired Tri-Tronics® Inc., a leading provider of electronic dog training equipment.
|
2011
|
|||
Revenue
|
$2.5 – 2.6 | B | |
Gross Margin
|
45-46 | % | |
Operating Margin
|
16-17 | % | |
EPS (Pro Forma)
|
$2.00 - $2.15 |
13-Weeks Ended
|
26-weeks Ended
|
|||||||||||||||
June 25,
|
June 26,
|
June 25,
|
June 26,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net Income (GAAP)
|
$ | 109,477 | $ | 134,816 | $ | 204,959 | $ | 172,144 | ||||||||
Foreign currency (gain) / loss, net of tax effects
|
12,588 | 35,756 | 2,261 | 73,916 | ||||||||||||
Net income (Pro Forma)
|
$ | 122,065 | $ | 170,572 | $ | 207,220 | $ | 246,060 | ||||||||
Net income per share (GAAP):
|
||||||||||||||||
Basic
|
$ | 0.56 | $ | 0.68 | $ | 1.06 | $ | 0.86 | ||||||||
Diluted
|
$ | 0.56 | $ | 0.67 | $ | 1.05 | $ | 0.86 | ||||||||
Net income per share (Pro Forma):
|
||||||||||||||||
Basic
|
$ | 0.63 | $ | 0.86 | $ | 1.07 | $ | 1.23 | ||||||||
Diluted
|
$ | 0.63 | $ | 0.85 | $ | 1.06 | $ | 1.23 | ||||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
194,051 | 198,948 | 193,986 | 199,437 | ||||||||||||
Diluted
|
194,875 | 200,102 | 194,801 | 200,626 |
13-Weeks Ended
|
26-weeks Ended
|
|||||||||||||||
June 25,
|
June 26,
|
June 25,
|
June 26,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net cash provided by operating activities
|
$ | 203,354 | $ | 181,736 | $ | 410,953 | $ | 381,867 | ||||||||
Less: purchases of property and equipment
|
(7,137 | ) | (9,285 | ) | (14,315 | ) | (13,220 | ) | ||||||||
Free Cash Flow
|
$ | 196,217 | $ | 172,451 | $ | 396,638 | $ | 368,647 |
13-Weeks Ended
|
26-Weeks Ended
|
|||||||||||||||
June 25,
|
June 26,
|
June 25,
|
June 26,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales
|
$ | (61,701 | ) | $ | (22,911 | ) | $ | (83,527 | ) | $ | (37,920 | ) | ||||
Cost of goods sold
|
(10,652 | ) | (3,764 | ) | (14,557 | ) | (6,546 | ) | ||||||||
Gross profit
|
(51,049 | ) | (19,147 | ) | (68,970 | ) | (31,374 | ) | ||||||||
Operating income
|
(51,049 | ) | (19,147 | ) | (68,970 | ) | (31,374 | ) | ||||||||
Income tax provision based on normalized tax effects
|
(7,068 | ) | (3,446 | ) | (5,862 | ) | (5,647 | ) | ||||||||
Net income
|
$ | (43,981 | ) | $ | (15,701 | ) | $ | (63,108 | ) | $ | (25,727 | ) | ||||
Net income per share:
|
||||||||||||||||
Basic
|
$ | (0.23 | ) | $ | (0.08 | ) | $ | (0.33 | ) | $ | (0.13 | ) | ||||
Diluted
|
$ | (0.23 | ) | $ | (0.08 | ) | $ | (0.32 | ) | $ | (0.13 | ) |
When:
|
Wednesday, August 3, 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
|
888-551-9020 or 719-457-2606.
|
|
Contact:
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investor.relations@garmin.com
|
(Unaudited)
|
||||||||
June 25,
|
December 25,
|
|||||||
2011
|
2010
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,418,871 | $ | 1,260,936 | ||||
Marketable securities
|
62,626 | 24,418 | ||||||
Accounts receivable, net
|
493,057 | 747,249 | ||||||
Inventories, net
|
385,678 | 387,577 | ||||||
Deferred income taxes
|
27,691 | 33,628 | ||||||
Deferred costs
|
28,343 | 20,053 | ||||||
Prepaid expenses and other current assets
|
46,261 | 24,894 | ||||||
Total current assets
|
2,462,527 | 2,498,755 | ||||||
Property and equipment, net
|
423,697 | 427,805 | ||||||
Marketable securities
|
1,016,869 | 777,401 | ||||||
Restricted cash
|
1,393 | 1,277 | ||||||
Licensing agreements, net
|
8,305 | 1,800 | ||||||
Noncurrent deferred income tax
|
73,613 | 73,613 | ||||||
Noncurrent deferred costs
|
31,047 | 24,685 | ||||||
Other intangible assets, net
|
181,004 | 183,352 | ||||||
Total assets
|
$ | 4,198,455 | $ | 3,988,688 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 125,680 | $ | 132,348 | ||||
Salaries and benefits payable
|
37,393 | 49,288 | ||||||
Accrued warranty costs
|
41,691 | 49,885 | ||||||
Accrued sales program costs
|
48,929 | 107,261 | ||||||
Deferred revenue
|
134,341 | 89,711 | ||||||
Accrued royalty costs
|
27,509 | 95,086 | ||||||
Accrued advertising expense
|
23,544 | 21,587 | ||||||
Other accrued expenses
|
70,622 | 63,043 | ||||||
Deferred income taxes
|
4,435 | 4,800 | ||||||
Income taxes payable
|
13,795 | 56,028 | ||||||
Dividend payable
|
388,148 | 0 | ||||||
Total current liabilities
|
916,087 | 669,037 | ||||||
Deferred income taxes
|
13,180 | 6,986 | ||||||
Non-current income taxes
|
157,979 | 153,621 | ||||||
Non-current deferred revenue
|
146,973 | 108,076 | ||||||
Other liabilities
|
1,542 | 1,406 | ||||||
Stockholders' equity:
|
||||||||
Shares, CHF 10 par value, 208,077,418 shares authorized and issued; 194,087,445 shares outstanding at June 25, 2011; and 194,358,038 shares outstanding at December 25, 2010;
|
1,797,435 | 1,797,435 | ||||||
Additional paid-in capital
|
53,707 | 38,268 | ||||||
Treasury stock
|
(116,099 | ) | (106,758 | ) | ||||
Retained earnings
|
1,097,970 | 1,264,613 | ||||||
Accumulated other comprehensive income
|
129,681 | 56,004 | ||||||
Total stockholders' equity
|
2,962,694 | 3,049,562 | ||||||
Total liabilities and stockholders' equity
|
$ | 4,198,455 | $ | 3,988,688 |
13-Weeks Ended
|
26-Weeks Ended
|
|||||||||||||||
June 25,
|
June 26,
|
June 25,
|
June 26,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales
|
$ | 674,099 | $ | 728,765 | $ | 1,181,933 | $ | 1,159,833 | ||||||||
Cost of goods sold
|
351,999 | 337,113 | 621,459 | 537,272 | ||||||||||||
Gross profit
|
322,100 | 391,652 | 560,474 | 622,561 | ||||||||||||
Advertising expense
|
34,098 | 42,440 | 54,054 | 59,841 | ||||||||||||
Selling, general and administrative expense
|
85,896 | 73,832 | 159,082 | 141,509 | ||||||||||||
Research and development expense
|
70,515 | 73,337 | 140,994 | 135,820 | ||||||||||||
Total operating expense
|
190,509 | 189,609 | 354,130 | 337,170 | ||||||||||||
Operating income
|
131,591 | 202,043 | 206,344 | 285,391 | ||||||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
7,639 | 5,791 | 14,854 | 12,669 | ||||||||||||
Foreign currency gains (losses)
|
(14,611 | ) | (43,605 | ) | (2,471 | ) | (90,141 | ) | ||||||||
Other
|
2,453 | 180 | 5,271 | 2,013 | ||||||||||||
Total other income (expense)
|
(4,519 | ) | (37,634 | ) | 17,654 | (75,459 | ) | |||||||||
Income before income taxes
|
127,072 | 164,409 | 223,998 | 209,932 | ||||||||||||
Income tax provision
|
17,595 | 29,593 | 19,039 | 37,788 | ||||||||||||
Net income
|
$ | 109,477 | $ | 134,816 | $ | 204,959 | $ | 172,144 | ||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$ | 0.56 | $ | 0.68 | $ | 1.06 | $ | 0.86 | ||||||||
Diluted
|
$ | 0.56 | $ | 0.67 | $ | 1.05 | $ | 0.86 | ||||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
194,051 | 198,948 | 193,986 | 199,437 | ||||||||||||
Diluted
|
194,875 | 200,102 | 194,801 | 200,626 | ||||||||||||
Dividends declared per share
|
$ | 2.00 | $ | 1.50 | $ | 2.00 | $ | 1.50 |
26-Weeks Ended
|
||||||||
June 25,
|
June 26,
|
|||||||
2011
|
2010
|
|||||||
Operating Activities:
|
||||||||
Net income
|
$ | 204,959 | $ | 172,144 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
27,393 | 26,746 | ||||||
Amortization
|
10,861 | 24,809 | ||||||
Loss (gain) on sale of property and equipment
|
308 | (6 | ) | |||||
Provision for doubtful accounts
|
3,563 | (552 | ) | |||||
Deferred income taxes
|
7,149 | (30 | ) | |||||
Unrealized foreign currency losses/(gains)
|
16,363 | 47,880 | ||||||
Provision for obsolete and slow moving inventories
|
(6,998 | ) | 10,309 | |||||
Stock compensation expense
|
17,315 | 19,099 | ||||||
Realized losses/(gains) on marketable securities
|
(4,176 | ) | (470 | ) | ||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
Accounts receivable
|
265,448 | 364,401 | ||||||
Inventories
|
20,659 | (64,272 | ) | |||||
Other current assets
|
(31,490 | ) | 5,142 | |||||
Accounts payable
|
(13,082 | ) | (52,248 | ) | ||||
Other current and non-current liabilities
|
(142,918 | ) | (193,657 | ) | ||||
Deferred revenue
|
83,628 | 37,425 | ||||||
Deferred cost
|
(14,652 | ) | (6,610 | ) | ||||
Income taxes payable
|
(30,033 | ) | (7,771 | ) | ||||
License fees
|
(3,344 | ) | (472 | ) | ||||
Net cash provided by operating activities
|
410,953 | 381,867 | ||||||
Investing activities:
|
||||||||
Purchases of property and equipment
|
(14,315 | ) | (13,220 | ) | ||||
Purchase of intangible assets
|
(2,587 | ) | (8,229 | ) | ||||
Purchase of marketable securities
|
(520,759 | ) | (169,062 | ) | ||||
Redemption of marketable securities
|
263,428 | 294,350 | ||||||
Change in restricted cash
|
(116 | ) | 1,111 | |||||
Net cash (used in)/provided by investing activities
|
(274,349 | ) | 104,950 | |||||
Financing activities:
|
||||||||
Proceeds from issuance of common stock through stock purchase plan
|
4,337 | 5,452 | ||||||
Taxes paid related to net share settlement of equity awards
|
(336 | ) | - | |||||
Stock repurchase
|
- | (84,328 | ) | |||||
Dividends
|
- | (299,103 | ) | |||||
Tax benefit related to stock option exercise
|
1,197 | 1,898 | ||||||
Net cash provided by/(used in) financing activities
|
5,198 | (376,081 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents
|
16,133 | (29,148 | ) | |||||
Net (decrease)/increase in cash and cash equivalents
|
157,935 | 81,588 | ||||||
Cash and cash equivalents at beginning of period
|
1,260,936 | 1,091,581 | ||||||
Cash and cash equivalents at end of period
|
$ | 1,418,871 | $ | 1,173,169 |
Reporting Segments
|
||||||||||||||||||||||||
Auto/
|
||||||||||||||||||||||||
Outdoor
|
Fitness
|
Marine
|
Mobile
|
Aviation
|
Total
|
|||||||||||||||||||
13-Weeks Ended June 25, 2011
|
||||||||||||||||||||||||
Net sales
|
$ | 81,007 | $ | 78,014 | $ | 79,117 | $ | 362,706 | $ | 73,255 | $ | 674,099 | ||||||||||||
Gross profit
|
$ | 52,948 | $ | 45,502 | $ | 44,208 | $ | 128,788 | $ | 50,654 | $ | 322,100 | ||||||||||||
Operating income
|
$ | 35,667 | $ | 25,384 | $ | 23,357 | $ | 25,277 | $ | 21,906 | $ | 131,591 | ||||||||||||
13-Weeks Ended June 26, 2010
|
||||||||||||||||||||||||
Net sales
|
$ | 79,847 | $ | 62,469 | $ | 74,310 | $ | 447,225 | $ | 64,914 | $ | 728,765 | ||||||||||||
Gross profit
|
$ | 53,257 | $ | 38,506 | $ | 49,108 | $ | 205,336 | $ | 45,445 | $ | 391,652 | ||||||||||||
Operating income
|
$ | 38,035 | $ | 24,724 | $ | 32,146 | $ | 88,548 | $ | 18,590 | $ | 202,043 | ||||||||||||
26-Weeks Ended June 25, 2011
|
||||||||||||||||||||||||
Net sales
|
$ | 147,458 | $ | 134,382 | $ | 130,425 | $ | 627,255 | $ | 142,413 | $ | 1,181,933 | ||||||||||||
Gross profit
|
$ | 94,301 | $ | 79,293 | $ | 77,406 | $ | 211,340 | $ | 98,134 | $ | 560,474 | ||||||||||||
Operating income
|
$ | 60,474 | $ | 40,841 | $ | 38,490 | $ | 26,872 | $ | 39,667 | $ | 206,344 | ||||||||||||
26-Weeks Ended June 26, 2010
|
||||||||||||||||||||||||
Net sales
|
$ | 139,233 | $ | 105,819 | $ | 115,625 | $ | 668,149 | $ | 131,007 | $ | 1,159,833 | ||||||||||||
Gross profit
|
$ | 91,768 | $ | 65,557 | $ | 73,338 | $ | 300,110 | $ | 91,788 | $ | 622,561 | ||||||||||||
Operating income
|
$ | 62,404 | $ | 38,923 | $ | 41,075 | $ | 105,530 | $ | 37,459 | $ | 285,391 |