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Garmin Reports Third Quarter 2012 Results With Growth In Revenue, Operating Margin And EPS; 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, Forerunner, Tri-Tronics and Nexus are registered trademarks and Alpha 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.

Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)
       
(Unaudited)  
Sept 29, December 31,
2012   2011
Assets
Current assets:
Cash and cash equivalents $ 1,247,073 $ 1,287,160
Marketable securities 122,448 111,153
Accounts receivable, net 508,725 607,450
Inventories, net 443,416 397,741
Deferred income taxes 50,457 42,957
Deferred costs 50,047 40,033
Prepaid expenses and other current assets   50,882     69,790  
Total current assets 2,473,048 2,556,284
 
Property and equipment, net 407,853 417,105
 
Marketable securities 1,349,176 1,097,002
Restricted cash 830 771
Licensing fees, net 11,882 5,517
Noncurrent deferred income tax 107,190 107,190
Noncurrent deferred costs 39,750 40,823
Other intangible assets, net   241,013     246,646  
Total assets $ 4,630,742   $ 4,471,338  
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 147,866 $ 164,010
Salaries and benefits payable 56,533 45,964
Accrued warranty costs 39,147 46,773
Accrued sales program costs 31,952 52,262
Deferred revenue 232,715 188,987
Accrued license fees 60,521 99,025
Accrued advertising expense 19,190 31,915
Other accrued expenses 63,841 67,912
Deferred income taxes 6,382 5,782
Income taxes payable 50,076 77,784
Dividend payable   175,331     77,865  
Total current liabilities 883,554 858,279
 
Deferred income taxes 7,120 4,951
Non-current income taxes 171,614 161,904
Non-current deferred revenue 179,672 188,132
Other liabilities 1,035 1,491
 
Stockholders' equity:

Shares, CHF 10 par value, 208,077,418 shares authorized and issued; 194,970,003 shares outstanding at September 29, 2012; and 194,662,617 shares outstanding at December 31, 2011;

1,797,435 1,797,435
Additional paid-in capital 86,513 61,869
Treasury stock (95,322 ) (103,498 )
Retained earnings 1,477,504 1,413,582
Accumulated other comprehensive income   121,617     87,193  
Total stockholders' equity   3,387,747     3,256,581  
Total liabilities and stockholders' equity $ 4,630,742   $ 4,471,338  
 
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
       
13-Weeks Ended 39-Weeks Ended
Sept 29, Sept 24, Sept 29, Sept 24,
2012 2011 2012 2011
Net sales $ 672,376 $ 666,993 $ 1,947,127 $ 1,848,925
 
Cost of goods sold   313,321     322,662     882,501     944,120  
 
Gross profit 359,055 344,331 1,064,626 904,805
 
Advertising expense 30,102 35,310 91,952 89,364
Selling, general and administrative expense 86,402 88,751 275,763 247,833
Research and development expense   82,489     72,936     242,510     213,930  
Total operating expense   198,993     196,997     610,225     551,127  
 
Operating income 160,062 147,334 454,401 353,678
 
Other income (expense):
Interest income 7,987 8,464 26,278 23,318
Foreign currency gains (losses) (6,364 ) 14,893 (16,124 ) 12,422
Other   942     4,345     5,064     9,616  
Total other income (expense)   2,565     27,702     15,218     45,356  
 
Income before income taxes 162,627 175,036 469,619 399,034
 
Income tax provision   22,279     24,655     56,510     43,694  
 
Net income $ 140,348   $ 150,381   $ 413,109   $ 355,340  
 
Net income per share:
Basic $ 0.72 $ 0.77 $ 2.12 $ 1.83
Diluted $ 0.72 $ 0.77 $ 2.11 $ 1.82
 

Weighted average common shares outstanding:

Basic 194,912 194,112 194,834 194,028
Diluted 196,161 194,828 196,171 194,809
 
 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 
  39-Weeks Ended
Sept 29,   Sept 24,
2012 2011
Operating Activities:
Net income $ 413,109 $ 355,340

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

Depreciation 40,025 40,558
Amortization 22,905 19,772
Gain on sale of property and equipment (17 ) (2,407 )
Provision for doubtful accounts 2,786 6,227
Deferred income taxes (7,384 ) 12,429
Unrealized foreign currency losses/(gains) 24,974 (5,366 )
Provision for obsolete and slow moving inventories 3,795 2,590
Stock compensation expense 26,364 27,258
Realized gains on marketable securities (1,647 ) (5,633 )
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 103,039 256,656
Inventories (44,761 ) (58,655 )
Other current assets 21,007 (36,713 )
Accounts payable (20,271 ) (5,603 )
Other current and non-current liabilities (63,839 ) (72,349 )
Deferred revenue 35,277 115,096
Deferred cost (8,561 ) (23,175 )
Income taxes payable (28,098 ) (21,987 )
License fees   (8,669 )   (6,562 )
Net cash provided by operating activities 510,034 597,476
 
Investing activities:
Purchases of property and equipment (26,881 ) (26,523 )
Proceeds from sale of property and equipment 25 -
Purchase of intangible assets (5,174 ) (8,611 )
Purchase of marketable securities (1,004,021 ) (835,965 )
Redemption of marketable securities 735,521 599,740
Change in restricted cash (59 ) (122 )
Acquisitions, net of cash acquired   (4,010 )   (52,688 )
Net cash used in investing activities (304,599 ) (324,169 )
 
Financing activities:
Dividends paid (253,386 ) (154,835 )
Issuance of treasury stock related to equity awards 10,971 16,919
Tax benefit from issuance of equity awards 1,810 1,542
Purchase of treasury stock   (6,542 )   (11,675 )
Net cash used in financing activities (247,147 ) (148,049 )
 
Effect of exchange rate changes on cash and cash equivalents 1,625 3,212
   
Net increase/(decrease) in cash and cash equivalents (40,087 ) 128,470
Cash and cash equivalents at beginning of period   1,287,160     1,260,936  
Cash and cash equivalents at end of period $ 1,247,073   $ 1,389,406  
 
 
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 September 29, 2012
 
Net sales $ 105,572 $ 64,788 $ 44,766 $ 384,393 $ 72,857 $ 672,376
Gross profit $ 72,420 $ 41,885 $ 28,572 $ 166,007 $ 50,171 $ 359,055
Operating income $ 48,384 $ 21,219 $ 8,378 $ 65,165 $ 16,916 $ 160,062
 
13-Weeks Ended September 24, 2011
 
Net sales $ 94,720 $ 69,030 $ 48,055 $ 384,150 $ 71,038 $ 666,993
Gross profit $ 62,387 $ 41,476 $ 26,378 $ 166,941 $ 47,149 $ 344,331
Operating income $ 41,331 $ 20,452 $ 9,870 $ 56,215 $ 19,466 $ 147,334
                         
 
39-Weeks Ended September 29, 2012
 
Net sales $ 283,230 $ 217,815 $ 168,620 $ 1,055,786 $ 221,676 $ 1,947,127
Gross profit $ 186,574 $ 142,045 $ 105,205 $ 476,761 $ 154,041 $ 1,064,626
Operating income $ 118,032 $ 76,016 $ 35,584 $ 170,208 $ 54,561 $ 454,401
 
39-Weeks Ended September 24, 2011
 
Net sales $ 242,178 $ 203,411 $ 178,479 $ 1,011,405 $ 213,452 $ 1,848,925
Gross profit $ 156,689 $ 120,770 $ 103,784 $ 378,280 $ 145,282 $ 904,805
Operating income $ 101,805 $ 61,293 $ 48,360 $ 83,087 $ 59,133 $ 353,678




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