Garmin Reports First Quarter 2013 Results

Earnings Call Information

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

When:   Wednesday, May 1, 2013 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 (888) 510-1762
Contact:

Email Contact

 

An archive of the live webcast will be available until June 1, 2013 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 2013, the Company’s expected segment revenue growth rate, margins, new products to be introduced in 2013 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 29, 2012 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2012 Form 10-K can be downloaded from http://www.garmin.com/en-US/company/investors/sec/form-10-K/.

The global leader in satellite navigation, Garmin Ltd. and its subsidiaries have designed, manufactured, marketed and sold navigation, communication and information devices and applications since 1989 – most of which are enabled by GPS technology. Garmin’s products serve automotive, mobile, wireless, outdoor recreation, marine, aviation, and OEM applications. A member of the S&P 500 Index, Garmin Ltd. is incorporated in Switzerland, and its principal subsidiaries are located in the United States, Taiwan and the United Kingdom. For more information, visit Garmin's virtual pressroom at http://www8.garmin.com/company/newsroom/ or contact the Media Relations department at 913-397-8200.

Garmin, Approach, Edge, GPSMAP and Forerunner are registered trademarks and G1000H is a trademark 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 30, March 31,
2013 2012
Net sales $ 531,957 $ 556,597
 
Cost of goods sold   255,824     272,838  
 
Gross profit 276,133 283,759
 
Advertising expense 22,249 23,591
Selling, general and administrative expense 86,269 90,116
Research and development expense   87,689     79,719  
Total operating expense   196,207     193,426  
 
Operating income 79,926 90,333
 
Other income (expense):
Interest income 8,898 9,671
Foreign currency gains (losses) (8,348 ) (1,989 )
Other   1,158     1,541  
Total other income (expense)   1,708     9,223  
 
Income before income taxes 81,634 99,556
 
Income tax (benefit) provision   (7,032 )   12,698  
 
Net income $ 88,666   $ 86,858  
 
Net income per share:
Basic $ 0.45 $ 0.45
Diluted $ 0.45 $ 0.44
 

Weighted average common shares outstanding:

Basic 195,630 194,742
Diluted 196,457 195,673
 
   
Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)
     
(Unaudited)
March 30, December 29,
2013   2012
Assets
Current assets:
Cash and cash equivalents $ 1,093,440 $ 1,231,180
Marketable securities 145,478 153,083
Accounts receivable, net 450,594 603,673
Inventories, net 396,010 389,931
Deferred income taxes 68,528 68,785
Deferred costs 53,534 53,948
Prepaid expenses and other current assets   106,371     35,520  
Total current assets 2,313,955 2,536,120
 
Property and equipment, net 407,591 409,751
 
Marketable securities 1,479,764 1,488,312
Restricted cash 835 836
Noncurrent deferred income tax 92,828 93,920
Noncurrent deferred costs 37,955 42,359
Other intangible assets, net 223,316 232,597
Other assets   14,176     15,229  
Total assets $ 4,570,420   $ 4,819,124  
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 112,170 $ 131,263
Salaries and benefits payable 55,727 55,969
Accrued warranty costs 34,654 37,301
Accrued sales program costs 39,716 57,080
Deferred revenue 250,217 252,375
Accrued royalty costs 10,315 71,745
Accrued advertising expense 14,484 25,192
Other accrued expenses 59,930 69,806
Deferred income taxes 214 332
Income taxes payable 27,674 32,031
Dividend payable   -     175,932  
Total current liabilities 605,101 909,026
 
Deferred income taxes 2,421 2,467
Non-current income taxes 171,915 181,754
Non-current deferred revenue 171,662 193,047
Other liabilities 996 1,034
 
Stockholders' equity:

Shares, CHF 10 par value, 208,077,418 shares authorized and issued; 195,658,572 shares outstanding at March 30, 2013; and 195,591,854 shares outstanding at December 29, 2012

1,797,435 1,797,435
Additional paid-in capital 77,723 72,462
Treasury stock (79,479 ) (81,280 )
Retained earnings 1,693,291 1,604,625
Accumulated other comprehensive income   129,355     138,554  
Total stockholders' equity   3,618,325     3,531,796  
Total liabilities and stockholders' equity $ 4,570,420   $ 4,819,124  
 
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 
  13-Weeks Ended
March 30, March 31,
2013 2012
Operating Activities:
Net income $ 88,666 $ 86,858

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 12,619 13,790
Amortization 9,272 11,609
Loss on sale of property and equipment 36 10
Provision for doubtful accounts 727 1,037
Deferred income taxes 1,493 (2,271 )
Unrealized foreign currency (gains) losses (495 ) 3,626
Provision for obsolete and slow moving inventories 6,033 7,858
Stock compensation expense 5,438 9,844
Realized gains on marketable securities (1,073 ) (635 )
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 152,307 185,166
Inventories (13,608 ) (12,506 )
Other current and non-current assets (50,322 ) 16,950
Accounts payable (18,377 ) (58,319 )
Other current and non-current liabilities (100,784 ) (128,093 )
Deferred revenue (23,329 ) (884 )
Deferred cost 4,813 186
Income taxes payable   (14,053 )     (11,998 )
Net cash provided by operating activities 59,363 122,228
 
Investing activities:
Purchases of property and equipment (11,616 ) (5,758 )
Proceeds from sale of property and equipment 12 2
Purchase of intangible assets (347 ) (2,929 )
Purchase of marketable securities (258,604 ) (250,431 )
Redemption of marketable securities 270,925 207,143
Advances under loan receivable commitment (18,324 ) - -
Change in restricted cash (1 ) (57 )
Acquisitions, net of cash acquired   -     (2,816 )
Net cash used in investing activities (17,955 ) (54,846 )
 
Financing activities:
Dividends paid (175,956 ) (77,915 )
Proceeds from issuance of treasury stock related to equity awards 1,474 2,883
Tax benefit from issuance of equity awards 258 860
Purchase of treasury stock   (62 )   (311 )
Net cash used in financing activities (174,286 ) (74,483 )
 
Effect of exchange rate changes on cash and cash equivalents (4,862 ) 5,732
   
Net decrease in cash and cash equivalents (137,740 ) (1,369 )
Cash and cash equivalents at beginning of period   1,231,180     1,287,160  
Cash and cash equivalents at end of period $ 1,093,440   $ 1,285,791  
 
 
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 March 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
 
13-Weeks Ended March 31, 2012
 
Net sales $ 77,162 $ 71,215 $ 56,064 $ 279,269 $ 72,887 $ 556,597
Gross profit $ 47,262 $ 43,494 $ 33,496 $ 109,831 $ 49,676 $ 283,759
Operating income $ 25,909 $ 20,651 $ 8,778 $ 17,935 $ 17,060 $ 90,333
 

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