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Garmin Reports Second Quarter 2012 Results With Revenue And EPS Growth; Raises Full Year EPS Guidance

Stocks in this article: GRMN

http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

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. 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 www.garmin.com/pressroom or contact the Media Relations department at 913-397-8200.

Garmin, zūmo, eTrex and Forerunner are registered trademarks and Garmin Swim and fēnix 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.

* Learjet 70 and Learjet 75 are trademarks of Bombardier, Inc. or its subsidiaries.

Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)
                 
(Unaudited)        
June 30, December 31,
2012         2011
Assets
Current assets:
Cash and cash equivalents $1,267,719 $1,287,160
Marketable securities 97,177 111,153
Accounts receivable, net 486,395 607,450
Inventories, net 384,207 397,741
Deferred income taxes 47,263 42,957
Deferred costs 46,470 40,033
Prepaid expenses and other current assets 51,983   69,790  
Total current assets 2,381,214 2,556,284
 
Property and equipment, net 407,850 417,105
 
Marketable securities 1,280,354 1,097,002
Restricted cash 825 771
Licensing fees, net 4,647 5,517
Noncurrent deferred income tax 107,190 107,190
Noncurrent deferred costs 38,994 40,823
Other intangible assets, net 241,688   246,646  
Total assets $4,462,762   $4,471,338  
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $138,582 $164,010
Salaries and benefits payable 40,479 45,964
Accrued warranty costs 40,797 46,773
Accrued sales program costs 36,724 52,262
Deferred revenue 213,957 188,987
Accrued royalty costs 27,138 99,025
Accrued advertising expense 16,866 31,915
Other accrued expenses 73,327 67,912
Deferred income taxes 5,508 5,782
Income taxes payable 45,496 77,784
Dividend payable 263,078   77,865  
Total current liabilities $901,952 $858,279
 
Deferred income taxes 5,005 4,951
Non-current income taxes 165,691 161,904
Non-current deferred revenue 178,387 188,132
Other liabilities 1,040 1,491
 
Stockholders' equity:
Shares, CHF 10 par value, 208,077,418 shares authorized and issued;
194,875,335 shares outstanding at June 30, 2012;
and 194,662,617 shares outstanding at December 31, 2011; 1,797,435 1,797,435
Additional paid-in capital 78,390 61,869
Treasury stock (96,780 ) (103,498 )
Retained earnings 1,336,460 1,413,582
Accumulated other comprehensive income 95,182   87,193  
Total stockholders' equity 3,210,687   3,256,581  
Total liabilities and stockholders' equity $4,462,762   $4,471,338  
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
                               
13-Weeks Ended 26-Weeks Ended
June 30, June 25, June 30, June 25,
2012 2011 2012 2011
Net sales $718,154 $674,099 $1,274,751 $1,181,933
 
Cost of goods sold 296,341   351,999   569,180   621,459  
 
Gross profit 421,813 322,100 705,571 560,474
 
Advertising expense 38,258 34,098 61,849 54,054
Selling, general and administrative expense 99,246 85,896 189,362 159,082
Research and development expense 80,303   70,515   160,021   140,994  
Total operating expense 217,807   190,509   411,232   354,130  
 
Operating income 204,006 131,591 294,339 206,344
 
Other income (expense):
Interest income 8,620 7,639 18,291 14,854
Foreign currency gains (losses) (7,771 ) (14,611 ) (9,760 ) (2,471 )
Other 2,581   2,453   4,121   5,271  
Total other income (expense) 3,430   (4,519 ) 12,652   17,654  
 
Income before income taxes 207,436 127,072 306,991 223,998
 
Income tax provision 21,532   17,595   34,230   19,039  
 
Net income $185,904   $109,477   $272,761   $204,959  
 
Net income per share:
Basic $0.95 $0.56 $1.40 $1.06
Diluted $0.95 $0.56 $1.39 $1.05
 
Weighted average common
shares outstanding:
Basic 194,849 194,051 194,795 193,986
Diluted 196,261 194,875 196,232 194,801
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
        26-Weeks Ended
June 30,         June 25,
2012 2011
Operating Activities:
Net income $272,761 $204,959
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 27,351 27,393
Amortization 23,709 10,861
Loss on sale of property and equipment 11 308
Provision for doubtful accounts 2,256 3,563
Deferred income taxes (5,268 ) 7,149
Unrealized foreign currency losses 18,556 16,363
Provision for obsolete and slow moving inventories 3,276 (6,998 )
Stock compensation expense 18,043 17,315
Realized gains on marketable securities (1,463 ) (4,176 )
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 117,422 265,448
Inventories 10,004 20,659
Other current assets 18,048 (31,490 )
Accounts payable (26,627 ) (13,082 )
Other current and non-current liabilities (103,327 ) (142,918 )
Deferred revenue 15,493 83,628
Deferred cost (4,652 ) (14,652 )
Income taxes payable (32,555 ) (30,033 )
License fees (7,905 ) (3,344 )
Net cash provided by operating activities 345,133 410,953
 
Investing activities:
Purchases of property and equipment (17,426 ) (14,315 )
Proceeds from sale of property and equipment

 

14 -
Purchase of intangible assets (4,682 ) (2,587 )
Purchase of marketable securities (639,612 ) (520,759 )
Redemption of marketable securities 464,329 263,428
Change in restricted cash (54 ) (116 )
Acquisitions, net of cash acquired (2,818 ) -  
Net cash used in investing activities (200,249 ) (274,349 )
 
Financing activities:
Dividends paid (165,638 ) -
Issuance of treasury stock related to equity awards 10,133 15,637
Tax benefit from issuance of equity awards 1,304 1,197
Purchase of treasury stock (6,460 ) (11,636 )
Net cash (used in)/provided by financing activities (160,661 ) 5,198
 
Effect of exchange rate changes on cash and cash equivalents (3,664 ) 16,133
   
Net (decrease)/increase in cash and cash equivalents (19,441 ) 157,935
Cash and cash equivalents at beginning of period 1,287,160   1,260,936  
Cash and cash equivalents at end of period $1,267,719   $1,418,871  
 
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 June 30, 2012
 
Net sales $100,496 $81,812 $67,790 $392,124 $75,932 $718,154
Gross profit $66,892 $56,665 $43,139 $200,923 $54,194 $421,813
Operating income $43,739 $34,146 $18,427 $87,108 $20,586 $204,006
 
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
                                                 
 
26-Weeks Ended June 30, 2012
 
Net sales $177,659 $153,026 $123,854 $671,393 $148,819 $1,274,751
Gross profit $114,154 $100,160 $76,634 $310,753 $103,870 $705,571
Operating income $69,648 $54,797 $27,205 $105,043 $37,646 $294,339
 
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
 




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