Garmin Reports Record Third Quarter Revenues with Strong Operating Margin and Increased Market Share

Earnings Call Information

The information for Garmin Ltd.s earnings call is as follows:

When:   Wednesday, October 29, 2008 at 11:00 a.m. Eastern
Where:

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

How:

Simply log on to the web at the address above or call to listen in at 800-891-6383.

Contact:

investor.relations@garmin.com

A phone recording will be available for five business days following the earnings call and can be accessed by dialing 800-642-1687 or (706) 645-9291 and utilizing the access code 67156061. An archive of the live webcast will be available until November 28, 2008 on the Garmin website at http://www.garmin.com. To access the replay, click on the Investor Relations link and click over to the Events Calendar page.

This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding the companys estimated earnings and revenue for fiscal 2008, the Companys expected segment revenue growth rate, margins, the number of new products to be introduced in 2008 and the companys plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors affecting Garmin, including, but not limited to, the risk factors that are described in the Annual Report on Form 10-K for the year ended December 29, 2007 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmins 2007 Form 10-K can be downloaded from 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. Garmins products serve automotive, mobile, wireless, outdoor recreation, marine, aviation, and OEM applications. Garmin Ltd. is incorporated in the Cayman Islands, 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, nüvi, Edge and Forerunner are registered trademarks, and nüvifone, Oregon, Colorado and GHP 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)  
September 27, December 29,
2008     2007
Assets
Current assets:
Cash and cash equivalents $521,540 $707,689
Marketable securities 18,048 37,551
Accounts receivable, net 678,750 952,513
Inventories, net 698,927 505,467
Deferred income taxes 87,109 107,376
Prepaid expenses and other current assets 32,204   22,179
 
Total current assets 2,036,578 2,332,775
 
Property and equipment, net 453,419 374,147
 
Marketable securities 309,492 386,954
Restricted cash 1,452 1,554
Licensing agreements, net 6,483 14,672
Other intangible assets, net 207,889   181,358
 
Total assets $3,015,313   $3,291,460
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $217,122 $341,053
Salaries and benefits payable 41,633 31,696
Accrued warranty costs 81,291 71,636
Other accrued expenses 154,102 280,603
Income taxes payable 50,994 76,895
Dividend payable 151,900   -
 
Total current liabilities 697,042 801,883
 
Deferred income taxes 11,298 11,935
Non-current taxes 166,075 126,593
Other liabilities 1,058 435
 
Stockholders' equity:
Common stock, $0.005 par value, 1,000,000,000 shares authorized:

Issued and outstanding shares - 202,533,000 as of September 27, 2008 and 216,980,000 as of December 29, 2007

1,511 1,086
Additional paid-in capital 0 132,264
Retained earnings 2,139,214 2,171,134
Accumulated other comprehensive income (885 ) 46,130
 
Total stockholders' equity 2,139,840   2,350,614
Total liabilities and stockholders' equity $3,015,313   $3,291,460
 
See accompanying notes.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
       
13-Weeks Ended 39-Weeks Ended
September 27, September 29, September 27, September 29,
2008 2007 2008 2007
 
Net sales $870,355 $728,673 $2,445,830 $1,963,298
 
Cost of goods sold 484,716   386,822   1,322,948 1,009,028
 
Gross profit 385,639 341,851 1,122,882 954,270
 
Selling, general and administrative expense 118,527 87,060 341,380 248,358
Research and development expense 52,749   40,634   155,904 111,863
171,276   127,694   497,284 360,221
 
Operating income 214,363 214,157 625,598 594,049
 
Other income (expense):
Interest income 8,770 11,798 26,830 31,997
Foreign currency (12,744 ) (3,626 ) 4,818 3,493
Gain on sale of equity securities 0 - 50,949 -
Other 1,023   297   1,824 631
(2,951 ) 8,469   84,421 36,121
 
Income before income taxes 211,412 222,626 710,019 630,170
 
Income tax provision 40,168   29,119   134,904 82,426
 
Net income $171,244   $193,507   $575,115 $547,744
 
Net income per share:
Basic $0.83 $0.89 $2.71 $2.53
Diluted $0.82 $0.88 $2.68 $2.50
 
Weighted average common
shares outstanding:
Basic 206,634 216,773 212,299 216,456
Diluted 208,107 220,644 214,252 219,482
 
See accompanying notes.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
  39-Weeks Ended
September 27,   September 29,
2008 2007
Operating Activities:
Net income $575,115 $547,744
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 33,797 22,786
Amortization 20,823 18,803
Loss (gain) on sale of property and equipment (243 ) 71
Provision for doubtful accounts 4,289 3,467
Deferred income taxes 28,623 (1,157 )
Foreign currency transaction gains/losses 11,266 3,232
Provision for obsolete and slow moving inventories 29,439 21,502
Stock compensation expense 28,815 8,830
Realized gains on marketable securities (50,884 ) 0
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 302,012 (90,497 )
Inventories (196,471 ) (234,920 )
Other current assets (977 ) 4,510
Accounts payable (175,715 ) 117,034
Other current and non-current liabilities (95,588 ) 147,608
Income taxes payable 1,593 9,486
Purchase of licenses (3,191 ) (22,594 )
Net cash provided by operating activities 512,703 555,905
 
Investing activities:
Purchases of property and equipment (110,480 ) (128,893 )
Proceeds from sale of property and equipment 8 4
Purchase of intangible assets (4,061 ) (2,481 )
Purchase of marketable securities (366,336 ) (983,716 )
Redemption of marketable securities 444,102 1,141,431
Change in restricted cash 106 (56 )
Acquisitions, net of cash acquired (50,497 ) (84,126 )
Net cash used in investing activities (87,158 ) (57,837 )
 
Financing activities:
Proceeds from issuance of common stock 7,703 15,358
Stock repurchase (624,688 ) -
Dividends 0 (162,531 )
Payments on long term debt - (218 )
Tax benefit related to stock option exercise 2,309   15,776  
Net cash used in financing activities (614,676 ) (131,617 )
 
Effect of exchange rate changes on cash and cash equivalents 2,982 (25 )
   
Net (decrease)/increase in cash and cash equivalents (186,149 ) 366,428
Cash and cash equivalents at beginning of period 707,689   337,321  
Cash and cash equivalents at end of period $521,540   $703,749  
 
See accompanying notes.
Garmin Ltd. And Subsidiaries
Revenue, Gross Profit, and Operating Income by Segment (Unaudited)
       
Reporting Segments
Outdoor/ Auto/
Fitness Marine Mobile Aviation Total
 
13-Weeks Ended September 27, 2008
 
Net sales $118,614 $44,048 $626,506 $81,187 $870,355
Gross profit $74,487 $21,714 $236,339 $53,099 $385,639
Operating income $52,136 $10,606 $124,359 $27,262 $214,363
 
13-Weeks Ended September 29, 2007
 
Net sales $87,747 $47,659 $518,939 $74,328 $728,673
Gross profit $46,553 $25,170 $221,148 $48,980 $341,851
Operating income $30,178 $15,623 $141,855 $26,501 $214,157
                   
 
39-Weeks Ended September 27, 2008
 
Net sales $308,255 $171,232 $1,710,248 $256,095 $2,445,830
Gross profit $179,834 $94,296 $675,953 $172,799 $1,122,882
Operating income $116,892 $52,510 $361,190 $95,006 $625,598
 
39-Weeks Ended September 29, 2007
 
Net sales $225,437 $170,433 $1,343,460 $223,968 $1,963,298
Gross profit $123,616 $92,704 $591,400 $146,550 $954,270
Operating income $79,986 $60,033 $370,448 $83,582 $594,049

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