Garmin Ltd. (Nasdaq:GRMN) today announced fourth quarter and full year results for the period ended December 29, 2012.
Fourth Quarter 2012 Financial Summary:
Fiscal Year 2012 Financial Summary:
- Total revenue of $769 million, down 16% from $910 million in fourth quarter 2011:
- Automotive/Mobile segment revenue decreased 25% to $437 million
- Outdoor segment revenue decreased 2% to $119 million
- Fitness segment revenue increased 10% to $104 million
- Aviation segment revenue decreased 2% to $70 million
- Marine segment revenue decreased 9% to $39 million
- Geographically, revenues decreased in all regions compared to fourth quarter 2011:
- Americas revenue was $445 million compared to $537 million, down 17%
- EMEA revenue was $253 million compared to $301 million, down 16%
- APAC revenue was $71 million compared to $72 million, down 1%
- Gross margin increased to 49% compared to 48% in fourth quarter 2011
- Operating margin decreased to 19% compared to 22% in fourth quarter 2011
- Diluted EPS decreased 22% to $0.66 from $0.85 in fourth quarter 2011; pro forma EPS decreased 29% to $0.68 from $0.96 in the same quarter of 2011. (Pro forma EPS excludes the impact of foreign currency transaction gains or losses.)
- Effective tax rate increased to 16.5% from 10.6% in fourth quarter 2011
- Generated $163 million of free cash flow in fourth quarter 2012.
- Total revenue of $2.72 billion, down 2% from $2.76 billion in 2011
- Automotive/Mobile segment revenue decreased 6% to $1.49 billion
- Outdoor segment revenue increased 11% to $402 million
- Fitness segment revenue increased 8% to $322 million
- Aviation segment revenue increased 2% to $292 million
- Marine segment revenue decreased 6% to $208 million
- Asia Pacific (APAC) contributed growth while the Americas and Europe, Middle East and Africa (EMEA) declined:
- Americas revenue was $1.51 billion compared to $1.53 billion, down 1%
- EMEA revenue was $945 million compared to $983 million, down 4%
- APAC revenue was $257 million compared to $248 million, up 4%
- Gross margin increased to 53% compared to 49% in 2011
- Operating margin increased to 22% from 20% in 2011
- Diluted earnings per share (EPS) increased 3% to $2.76 from $2.67 in fiscal year 2011; pro forma EPS increased 4% to $2.85 from $2.73 in fiscal year 2011. (Pro forma EPS excludes the impact of foreign currency transaction gains or losses.)
- Effective tax rate increased to 13.1% from 10.8% in fiscal year 2011
- Generated over $646 million of free cash flow in 2012 leading to a cash and marketable securities balance of $2.9 billion.
In accordance with GAAP, the Company is deferring significant revenue and the related costs associated with high margin sales of lifetime maps, connected services and premium traffic over their estimated economic life. A table outlining the impact of this net deferral in both 2012 and 2011 is included for reference. Results have not been adjusted unless specifically stated as such.
Executive overview from Cliff Pemble, President and Chief Executive Officer:
- Achieved full year gross and operating margin expansion allowing for EPS growth.
- Sold almost 15.4 million units in 2012 with unit growth in outdoor, fitness, and automotive OEM largely offsetting declines in personal navigation devices (PND).
- Continued to be the world-wide PND market share leader with market share gains globally.
- Honored as a new addition to the S&P 500 on December 12.
- Unveiled our next-generation infotainment system, K2, featuring a digital cockpit providing drivers a safe and intuitive way to stay connected and access all the functions they need while on the road.
- Introduced the 2013 nüvi® lineup in January 2013 with improved form factors and features, including Real Directions™, to appeal across a broad spectrum of customers.
- Launched the Edge® 510 and 810 for cyclists providing the accuracy and reliability expected from Garmin with the additional benefit of real-time connectivity.
“Entering 2012, we forecasted $2.7-2.8 billion of revenue and $2.45-2.60 of EPS. I am pleased to say that we met or exceeded those targets through a combination of solid execution by our associates and ongoing market share gains across our diverse set of products and geographies,” said Cliff Pemble, president and chief executive officer of Garmin Ltd. “Though business trends decelerated in the fourth quarter, we remain focused on new product development and market share gains to offset the secular declines in the PND industry and the continued generation of long-term shareholder value.