Garmin Reports Strong Second Quarter 2013 Results And Maintains Full Year Outlook

Garmin Ltd. (Nasdaq: GRMN) today announced results for the fiscal quarter ended June 29, 2013. Highlights in the quarter include:
  • Total revenue of $697 million in second quarter 2013 with traditional segments of outdoor, fitness, aviation and marine delivering 51% of total revenues and growing 8% over the year ago quarter
  • Operating margin of 24% with 64% of operating profit from traditional segments
  • Continued to gain global market share in the PND industry
  • Introduced the Monterra™, an Android™ powered outdoor GPS, supporting 3 rd party applications for outdoor professionals and enthusiasts
  • Announced the expansion of our relationships with Volkswagen and MINI, providing factory- or dealer-installed solutions for the compact car market
  • Generated $186 million of free cash flow in second quarter 2013
(in thousands,   13-Weeks Ended     26-Weeks Ended
except per share data) June 29,     June 30,     Yr over Yr June 29,     June 30,   Yr over Yr
2013 2012 Change 2013 2012 Change
Net sales $696,563 $718,154 -3% $1,228,520 $1,274,751 -4%
Automotive/Mobile 344,701 392,124 -12% 597,290 671,393 -11%
Outdoor 106,856 100,496 6% 183,022 177,659 3%
Aviation 88,042 75,932 16% 168,511 148,819 13%
Fitness 84,216 81,812 3% 156,653 153,026 2%
Marine 72,748 67,790 7% 123,044 123,854 -1%
Gross profit % 55% 59% 54% 55%
Operating profit % 24% 28% 20% 23%
Pro forma diluted EPS (1) $0.76 $0.98 -22% $1.16 $1.43 -19%
Note: 2012 results include one-time royalty fee benefit of $21 million impacting gross margin.
(1) See table on final page for reconciliation of GAAP EPS to Pro forma diluted EPS

Executive Overview from Cliff Pemble, President and Chief Executive Officer:

“The second quarter of 2013 was highlighted by stronger than expected revenue performance across all segments,” said Cliff Pemble, president and chief executive officer of Garmin Ltd. “We were particularly pleased to generate revenue growth in each of our traditional markets. While our performance was strong in second quarter and we believe that the outlook for growth in 2013 for the traditional markets is positive, we also anticipate that declines in the PND market will continue to be a significant headwind. Third quarter will be particularly challenging as we compare against a period of strong prior year sell-in driven by the timing of new product introductions and end-of-life promotions. Given these factors, we are maintaining our full year revenue and EPS guidance. Longer term, our primary focus remains innovation that is expected to fuel sustained revenue and EPS growth.”

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