8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of

the Securities Act of 1934

Date of Report (Date of earliest event reported): October 26, 2005

GARMIN LTD.

(Exact name of registrant as specified in its charter)

Cayman Islands	0-31983	98-0229227
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

P.O. Box 30464SMB

5^th Floor, Harbour Place

103 South Church Street

George Town, Grand Cayman, Cayman Islands

(Address of principal executive offices)

Registrant’s telephone number, including area code: (345) 946-5203

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On October 26, 2005, Garmin Ltd. issued a news release announcing its financial results for the fiscal third quarter ended September 24, 2005. A copy of the news release is attached as Exhibit 99.1.

The information in this Item 2.02, and Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of Garmin Ltd. under the Securities Act of 1933, as amended, or the Exchange Act made after the date hereof, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

(c) Exhibits. The following exhibit is furnished herewith.

Exhibit No.	Description
99.1	News Release dated October 26, 2005
	(furnished pursuant to Item 2.02.)

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GARMIN LTD.
Date: October 26, 2005	/s/ Andrew R. Etkind
	Andrew R. Etkind
	General Counsel and Secretary

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EXHIBIT INDEX

Exhibit No.	Description
99.1	News Release dated October 26, 2005

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EX-99.1

Exhibit 99.1

Garmin Reports Record Third Quarter,

Updates 2005 Guidance

CAYMAN ISLANDS, October 26, 2005/PRNewswire/ — Garmin Ltd. (Nasdaq: GRMN - news) today announced a record third quarter ended September 24, 2005. The company’s consumer segment experienced 31 percent revenue growth during the third quarter of 2005. The aviation segment achieved 26 percent revenue growth for the quarter, which led to overall revenue growth of 30 percent for the quarter.

“We are pleased with the results during the third quarter. Our StreetPilot products have been well received by the market. We experienced triple digit growth in our automotive product line which demonstrates that our products are well-positioned to take advantage of the growing demand for portable navigation devices,” said Dr. Min Kao, CEO of Garmin Ltd. “We look forward to continued success from the popular C-series and I-series during the holiday season, and with a full range of new products at every price point, we hope to continue to penetrate further the rapidly expanding automotive market through the remainder of the year and beyond,” said Dr. Kao. “Aviation sales were also strong during the third quarter due to growth in G1000 cockpit shipments and other panel-mount and portable products. We shipped a total of over 708,000 units in the third quarter of 2005, demonstrating the growing strength of the Garmin brand.”

Revenue for the quarter increased 30 percent to $251.3 million from $193.6 million in the year-ago quarter. Net income increased to $102.5 million, or $0.94 diluted earnings per share, compared to $67.1 million or $0.62 diluted earnings per share in the year-ago quarter. Third quarter net income included a $36.4 million foreign currency gain as a result of a stronger U.S. dollar compared to the Taiwan dollar. Excluding the effects of foreign currency, diluted EPS for the quarter was $0.67 compared to $0.58 in the year-ago quarter.

Consumer revenue for the third quarter totaled $190.7 million – a 31 percent growth compared to the third quarter of 2004. Aviation revenue totaled $60.6 million – a 26 percent increase compared to the year-ago quarter. Total units sold for the quarter increased to 708,000 from 540,000 – representing an increase of 31 percent.

Revenue increased across all geographic regions during the third quarter of fiscal 2005 when compared to the year-ago quarter:

• North America revenue was $163.0 million compared to $134.4 million, up 21 percent.

• Europe revenue was $75.6 million compared to $49.0 million, up 54 percent.

• Asia revenue was $12.7 million compared to $10.2 million, up 25 percent.

Revenue year to date increased 31 percent to $708.5 million from $541.6 million in the year-ago period. Net income increased to $224.1 million, or $2.05 diluted earnings per share, compared to $158.1 million or $1.45 diluted earnings per share in the year-ago period. Year to date net income included a $23.8 million foreign currency gain as a result of a stronger U.S. dollar compared to the Taiwan dollar. Excluding the effects of foreign currency, diluted EPS for the period was $1.88 compared to $1.44 in the year-ago period.

Consumer revenue year to date totaled $538.4 million – a 29 percent growth compared to the same period in 2004. Aviation revenue totaled $170.1 million – a 37 percent increase compared to the year-ago period. Total units sold for the period increased to 1,999,000 from 1,587,000 – representing an increase of 26 percent.

Revenue increased across all geographic regions during the nine months ending September 24, 2005 when compared to the year-ago period:

• North America revenue was $449.7 million compared to $367.5 million, up 22 percent.

• Europe revenue was $223.3 million compared to $149.1 million, up 50 percent.

• Asia revenue was $35.5 million compared to $25.0 million, up 42 percent.

“We are extremely pleased with our financial results year to date, and look forward to continued growth throughout the remainder of the year,” said Kevin Rauckman, chief financial officer of Garmin Ltd. Gross margins were in line with our expectations at 52.6 percent year to date. As expected, inventory build occurred in preparation for seasonal holiday demand, resulting in an increase in dollars of inventory, while days of inventory remained essentially flat. We also generated $81.2 million of free cash flow (defined as operating cash flow less capital expenditures for property, plant, and equipment) for the quarter, resulting in a cash and marketable securities balance of $700.9 million at the end of the third quarter 2005.” The company believes that free cash flow is an important measure because management uses it as a measure of the company’s quality of earnings and its ability to reinvest in the business.

Foreign Currency Translation—Non-GAAP Measures

Management believes that earnings per share before the impact of foreign currency translation gain or loss is an important measure. The majority of the company’s consolidated foreign currency translation gain or loss results from translation into New Taiwan dollars at the end of each reporting period of the significant cash and marketable securities, receivables and payables held in U.S. dollars by the company’s Taiwan subsidiary. Such translation is required under GAAP because the functional currency of this subsidiary is New Taiwan dollars. However, there is minimal cash impact from such foreign currency translation and management expects that the Taiwan subsidiary will continue to hold the majority of its cash, cash equivalents and marketable securities in U.S. dollars. Accordingly, earnings per share before the impact of foreign currency translation gain or loss allows an assessment of the company’s operating performance before the non-cash impact of the position of the U.S. dollar versus the New Taiwan dollar, which permits a consistent comparison of results between periods.

Fiscal 2005 Outlook / Updated Guidance

Garmin remains committed to expansion of its growing range of products and its ability to serve distributors and customers around the world. The Company has now introduced forty-six new products to the market through the end of September and expects to introduce a total of approximately sixty new products during fiscal year 2005.

Given strong results in the nine months ending September 24, 2005, the Company is updating previous fiscal year guidance. Diluted EPS for fiscal year 2005, excluding effects of foreign currency, is estimated to be in the range of $2.53 to $2.58 on estimated revenues of $1.0 billion to $1.02 billion. Management will continue to provide annual guidance updates and progress reports on a quarterly basis.

Dividend Declaration

As previously announced, the Garmin Board of Directors approved a $0.50/share annual cash dividend payable to shareholders of record on December 1, 2005. This dividend will be paid on December 15, 2005. The payment of future dividends will be at the discretion of the Board of Directors after taking into account various factors including operating results, anticipated needs, plans for acquisition or expansion and tax rates applicable to dividends.

Earnings Call Information

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

When:	Wednesday, October 26, 2005 at 11:00 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 800-883-9537.
Contact:	investor.relations@garmin.com

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A phone recording will be available for 24 hours following the earnings call and can be accessed by dialing 800-642-1687 utilizing the access code 7195259. An archive of the live webcast will be available until August 26, 2005 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 2005, the Company’s expected consumer segment growth rate 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, 2004 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2004 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

Through its operating subsidiaries, Garmin Ltd. designs, manufactures, and markets navigation, communications and information devices, most of which are enabled by GPS technology. Garmin is a leader in the general aviation and consumer markets and its products serve aviation, marine, general recreation, automotive, wireless and OEM applications. Garmin Ltd. is incorporated in the Cayman Islands, and its principal subsidiaries are located in the United States, Taiwan and United Kingdom. For more information, visit the investor relations site of Garmin Ltd. at www.garmin.com or contact the Investor Relations department at 913-397-8200.

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Garmin Ltd. And Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except per share information)

(Unaudited)

	13-Weeks Ended				39-Weeks Ended
	September 24, 2005		September 25, 2004		September 24, 2005		September 25, 2004
Net sales	$	251,329	$	193,616	$	708,477	$	541,601
Cost of goods sold		121,877		81,945		335,846		251,160
Gross profit		129,452		111,671		372,631		290,441
Selling, general and administrative expenses		24,180		19,859		77,790		55,902
Research and development expense		20,116		14,695		54,862		43,625
		44,296		34,554		132,652		99,527
Operating income		85,156		77,117		239,979		190,914
Other income(expense) (A)		40,971		6,793		37,011		6,708
Income before income taxes		126,127		83,910		276,990		197,622
Income tax provision		23,637		16,782		52,905		39,523
Net income	$	102,490	$	67,128	$	224,085	$	158,099
Net income per share:
Basic	$	0.95	$	0.62	$	2.07	$	1.46
Diluted	$	0.94	$	0.62	$	2.05	$	1.45
Weighted average common shares outstanding:
Basic		107,845		108,119		108,214		108,159
Diluted		108,930		108,879		109,159		108,989
Dividends declared per share	$	0.50	$	0.50	$	0.50	$	0.50

(A) Includes $36.4 million of foreign currency gains in Q3 2005 and $4.4 million of foreign currency gains in Q3 2004;

includes $23.8 million of foreign currency gains YTD 2005 and $0.5 million of foreign currency gains YTD 2004.

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Garmin Ltd. And Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

	(Unaudited) September 24, 2005
				December 25, 2004
Assets
Current assets:
Cash and cash equivalents	$	331,245		$	249,909
Marketable securities		36,048			64,367
Accounts receivable, net		151,777			110,119
Inventories		173,198			154,980
Deferred income taxes		47,621			38,527
Prepaid expenses and other current assets		17,834			19,069
Total current assets		757,723			636,971
Property and equipment, net		177,064			171,630
Restricted cash		1,411			1,457
Marketable securities		333,609			257,848
Other assets, net		34,919			49,485
Total assets	$	1,304,726		$	1,117,391
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	50,210		$	53,673
Other accrued expenses		54,237			51,661
Dividends payable		54,000			0
Income taxes payable		63,744			70,933
Total current liabilities		222,191			176,267
Deferred income taxes		14,103			5,267
Stockholders’ equity:
Common stock		1,080			1,084
Additional paid-in capital		88,948			108,949
Retained earnings		985,293			815,209
Accumulated other comprehensive gain/(loss)		(6,889	)		10,615
Total stockholders’ equity		1,068,432			935,857
Total liabilities and stockholders’ equity	$	1,304,726		$	1,117,391

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