Garmin Reports Solid First Quarter 2015 Margins and Operating

Garmin Reports Solid First Quarter 2015 Margins and Operating Results

Garmin, fēnix, Forerunner and VIRB are registered trademarks and vívofit, vívoactive, Vector and nüvicam 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
	March 28,			March 29,
	2015			2014
Net sales	$	585,394		$	583,221

Cost of goods sold		241,272			252,387

Gross profit		344,122			330,834

Advertising expense		27,672			24,428
Selling, general and administrative expense		98,750			89,873
Research and development expense		106,002			96,164
Total operating expense		232,424			210,465

Operating income		111,698			120,369

Other income (expense):
Interest income		8,024			9,768
Foreign currency gains (losses)		(44,264	)		12,814
Other		738			(484	)
Total other income (expense)		(35,502	)		22,098

Income before income taxes		76,196			142,467

Income tax provision		9,403			23,649

Net income	$	66,793		$	118,818

Net income per share:
Basic	$	0.35		$	0.61
Diluted	$	0.35		$	0.61

Weighted average common
shares outstanding:
Basic		191,762			195,090
Diluted		192,341			195,860


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

	(Unaudited)
	March 28,			December 27,
		2015			2014
Assets
Current assets:
Cash and cash equivalents	$	1,171,388		$	1,196,268
Marketable securities		270,212			167,989
Accounts receivable, net		425,650			570,191
Inventories, net		470,444			420,475
Deferred income taxes		56,165			56,102
Deferred costs		48,824			51,336
Prepaid expenses and other current assets		57,624			48,615
Total current assets		2,500,307			2,510,976

Property and equipment, net		436,104			430,887

Marketable securities		1,259,102			1,407,344
Restricted cash		313			308
Noncurrent deferred income tax		66,664			67,712
Noncurrent deferred costs		32,142			36,140
Intangible assets, net		224,381			218,083
Other assets		24,266			21,853
Total assets	$	4,543,279		$	4,693,303

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	125,745		$	149,094
Salaries and benefits payable		63,775			62,764
Accrued warranty costs		23,866			27,609
Accrued sales program costs		37,049			58,934
Deferred revenue		185,899			203,598
Accrued royalty costs		5,811			51,889
Accrued advertising expense		17,190			26,334
Other accrued expenses		68,998			67,780
Deferred income taxes		13,370			17,673
Income taxes payable		190,594			182,260
Dividend payable		91,964			185,326
Total current liabilities		824,261			1,033,261

Deferred income taxes		39,448			39,497
Non-current income taxes		78,663			80,611
Non-current deferred revenue		121,906			135,130
Other liabilities		1,371			1,437

Stockholders' equity:
Shares, CHF 10 par value, 208,077 shares authorized and issued;
191,520 shares outstanding at March 28, 2015
and 191,815 shares outstanding at December 27, 2014		1,797,435			1,797,435
Additional paid-in capital		80,598			73,521
Treasury stock		(345,143	)		(330,132	)
Retained earnings		1,928,165			1,859,972
Accumulated other comprehensive income		16,575			2,571
Total stockholders' equity		3,477,630			3,403,367
Total liabilities and stockholders' equity	$	4,543,279		$	4,693,303


Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
		13-Weeks Ended
		March 28,			March 29,
		2015			2014
Operating Activities:
Net income		$	66,793		$	118,818
Adjustments to reconcile net income to net cash
provided by operating activities:
	Depreciation		12,280			11,672
	Amortization		6,584			6,740
	Gain (loss) on sale of property and equipment		24			(617	)
	Provision for doubtful accounts		(1,080	)		(189	)
	Deferred income taxes		(3,647	)		5,942
	Unrealized foreign currency loss (gain)		47,877			(15,334	)
	Provision for obsolete and slow moving inventories		4,344			3,384
	Stock compensation expense		7,769			6,325
	Realized (gain) loss on marketable securities		(340	)		1,544
Changes in operating assets and liabilities:
	Accounts receivable		129,448			137,198
	Inventories		(56,897	)		(64,083	)
	Other current and non-current assets		(11,537	)		(1,591	)
	Accounts payable		(25,957	)		(20,411	)
	Other current and non-current liabilities		(73,408	)		(80,011	)
	Deferred revenue		(29,870	)		(45,290	)
	Deferred cost		6,470			8,129
	Income taxes payable		2,802			(1,053	)
Net cash provided by operating activities			81,655			71,173

Investing activities:
Purchases of property and equipment			(18,143	)		(15,537	)
Proceeds from sale of property and equipment			664			609
Purchase of intangible assets			(717	)		(1,111	)
Purchase of marketable securities			(254,741	)		(298,695	)
Redemption of marketable securities			308,751			223,786
Proceeds from repayment on loan receivable			0			94,507
Change in restricted cash			(5	)		3
Acquisitions, net of cash acquired			(12,632	)		0
Net cash provided by investing activities			23,177			3,562

Financing activities:
Dividends paid			(91,964	)		(87,853	)
Purchase of treasury stock under share repurchase plan			(16,260	)		(32,986	)
Purchase of treasury stock related to equity awards			(89	)		(58	)
Proceeds from issuance of treasury stock related to equity awards			246			1,107
Tax benefit from issuance of equity awards			399			2,199
Net cash used in financing activities			(107,668	)		(117,591	)

Effect of exchange rate changes on cash and cash equivalents			(22,044	)		398

Net decrease in cash and cash equivalents			(24,880	)		(42,458	)
Cash and cash equivalents at beginning of period			1,196,268			1,179,149
Cash and cash equivalents at end of period		$	1,171,388		$	1,136,691


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

	Reporting Segments

	Outdoor	Fitness	Marine	Auto	Aviation	Total

13-Weeks Ended March 28, 2015

Net sales	$75,915	$130,994	$64,297	$216,126	$98,062	$585,394
Gross profit	$50,220	$83,075	$35,513	$103,803	$71,511	$344,122
Operating income	$23,834	$34,638	$4,566	$22,480	$26,180	$111,698

13-Weeks Ended March 29, 2014

Net sales	$83,985	$100,288	$60,002	$242,952	$95,994	$583,221
Gross profit	$50,910	$64,085	$31,053	$113,791	$70,995	$330,834
Operating income	$23,683	$33,512	$3,810	$30,564	$28,800	$120,369


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

	13-Weeks Ended
	March 28,	March 29,	Yr over Yr
	2015	2014	Change
Net sales	$585,394	$583,221	0%
Americas	305,261	304,808	0%
EMEA	208,351	220,603	-6%
APAC	71,782	57,810	24%

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

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