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Garmin® Reports Record Fourth Quarter and 11th Consecutive Year of Record Revenue

CAYMAN ISLANDS, February 13, 2002 /PRNewswire/ — Garmin Ltd. (Nasdaq: GRMN) today announced record revenue and net income for its fourth fiscal quarter and its fiscal year ended Dec. 29, 2001.

Revenue for the quarter was $93.0 million — up 9 percent from the $85.7 million generated in the year-ago quarter. Net income increased to $28.0 million, or $0.26 per share, compared to $27.6 million or $0.27 per share in the year-ago quarter ($0.26 per share in the year-ago quarter on a proforma basis utilizing the current diluted share count of 107,906,000). Fourth quarter net income included a $3.9 million foreign currency gain as a result of a stronger U.S. dollar compared to the New Taiwan Dollar. Excluding the foreign currency gain, diluted EPS for the quarter was $0.23, which compares to a proforma diluted EPS of $0.20 for the fourth quarter of 2000 (excluding foreign currency gains and utilizing the current diluted share count of 107,906,000 on a proforma basis). The diluted EPS of $0.23 recorded for the fourth quarter of 2001 was in-line with company guidance of $0.20 to $0.23.

Revenue for fiscal 2001 was $369.1 million — up 7 percent from the $345.7 million generated during fiscal 2000. Net income increased to $113.4 million, or $1.05 per share, compared to $105.7 million or $1.05 per share in the prior year ($0.97 per share in the prior year on a proforma basis utilizing the current diluted share count of 108,447,000). Fiscal year 2001 net income included an $11.6 million foreign currency gain. Excluding the foreign currency gain, diluted EPS for the year was $0.97, which compares to a proforma diluted EPS of $0.93 for fiscal year 2000 (excluding foreign currency gains and utilizing the current diluted share count of 108,447,000 on a proforma basis). The diluted EPS of $0.97 recorded for fiscal year 2001 was in-line with company guidance of $0.94 to $0.97.

"Fiscal year 2001 represented our 11th consecutive year of record revenue," said Dr. Min Kao, co-CEO and co-chairman of Garmin Ltd. "The 7 percent revenue increase for the year is quite an accomplishment given the many challenges that we faced during 2001. Despite a recession, events of September 11, and restrictions on U.S. airspace, which directly impacted the aviation segment of our business, Garmin was able to introduce 25 new products during the year, while continuing to grow its business and investing in the future. Consumers continued to exhibit strong demand for our GPS-enabled products during the fourth quarter despite an overall lackluster economy. Aviation revenue began to stabilize signaling a potential slow return in the general aviation market. And, we continued to expand our worldwide distribution channels as we entered into new partnerships with BMW, Timex, Eurocopter, Dixons, Staples, Radio Shack Canada, The Sharper Image, and Good Guys. Our strategy of product innovation and expanding our markets has not changed as we progress into 2002."

Consumer revenue for the fourth quarter totaled $69.8 million — a 23 percent growth compared to the fourth quarter of 2000. Aviation revenue totaled $23.2 million — a 19 percent decline compared to the year-ago quarter. Consumer revenue for the year totaled $263.3 million — a 14 percent growth compared to fiscal 2000. Aviation revenue totaled $105.8 million — a 9 percent decline compared to fiscal 2000. Total units increased to 1,331,000 in 2001 compared to 1,223,000 in the prior year, representing a growth of 9 percent.

Revenue growth increased across all geographic regions during fiscal year 2001 when compared to the prior year:

  • U.S. revenue was $275.6 million compared to $261.5 million, up 5 percent.
  • Europe revenue was $78.5 million compared to $69.4 million, up 13 percent.
  • Asia revenue was $15.0 million compared to $14.8 million, up 1 percent.

"We maintained our gross margin levels as margins improved to 53.7 percent during fiscal year 2001 when compared to 53.1 percent in 2000," said Kevin Rauckman, chief financial officer of Garmin Ltd. "We continue to generate significant cash flow, as net cash flow increased to $74.3 million during 2001 from $43.2 million in 2000, which excludes the $104.4 million of proceeds generated from our IPO. We successfully managed inventory levels during 2001 as inventory decreased by $28.7 million when compared to the prior year. Fiscal year 2001 was a challenging year, however, we have been able to maintain our momentum as we progress through the first quarter of this year."

2002 Outlook
The company estimates that its diluted EPS for the first quarter of 2002, excluding effects for foreign currency, will be in the range of $0.23 to $0.25 on revenues between $93.0 million to $98.0 million. Diluted EPS estimates for fiscal year 2002, excluding effects of foreign currency, are in the range $1.00 to $1.07 on revenues between $400.0 million to $418.0 million.

Notice of Annual Shareholders Meeting
The annual shareholders' meeting of Garmin Ltd. will be held on June 7, 2002. The record date for shareholders entitled to vote at the annual meeting is April 18, 2002.

Earnings Call Information
The information for Garmin Ltd.'s earnings call is as follows:

When: Wednesday, Feb. 13, 2002 at 11:00 a.m. Eastern
Where: Events Calendar
How: Simply log on to the web at the address above or call to listen in at 800-473-8796.
Contact: investor.relations@garmin.com

A phone recording will be available for 24 hours following the earnings call and can be accessed by dialing 800-252-6030 utilizing the access code 10917084. An archive of the live webcast will be available until Feb. 28, 2002 on the Garmin website at http://www.garmin.com. To access the replay, click on Events Calendar.

About Garmin
Through its operating subsidiaries, Garmin Ltd. designs, manufactures, and markets navigation, communication and information devices — most of which are enabled by GPS technology. Garmin is the leader in the aviation and consumer GPS markets, and its products serve aviation, marine, general recreation, automotive, wireless and OEM applications. Garmin Ltd. is incorporated in the Cayman Islands, and its principal subsidiaries are located in the United States, Taiwan and United Kingdom. For more information, visit the Investor Relations site of Garmin Ltd. at www.garmin.com, or contact the Investor Relations department at 913-397-8200.

This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding the company’s future financial position, revenues, earnings, product introductions, 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. Information concerning risk factors that could affect Garmin's actual results is contained in the Annual Report on Form 10-K for the year ended December 30, 2000 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin's Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share information)

  Three Months Ended Fiscal Year Ended

(Unaudited)
Dec 29, 2001

Dec 30, 2000 (Unaudited)
Dec. 29, 2001
Dec. 30, 2000
Net sales $93,030 $85,662 $369,119 $345,741
Cost of goods sold 43,664 42,906 (A) 170,960 162,015
Gross profit 49,366 42,756 198,159 183,726
Selling, general and administrative expense 9,965 8,990 38,709 32,669
Research and development expense 7,793 6,290 28,164 21,764
  17,758 15,280 66,873 54,433
Operating income 31,608 27,476 131,286 129,293
Other income (expense) 5,885 (B) 11,278 (B) 20,748 (C) 11,629 (C)
Income before income taxes 37,493 38,754 152,034 140,922
Income tax provision 9,523 11,143 38,587 35,259
Net income $27,970 $27,611 $113,447 $105,663

Net income per share:
Basic
Diluted


$0.26
$0.26

$0.27
$0.27

$1.05
$1.05

$1.05
$1.05
Weighted average common shares outstanding:
Basic
Diluted

107,662
107,906

100,489
100,506

108,097
108,447

100,489
100,506

(A) Includes $2.7 million of charges related to inventory reserves recorded in Q4 2000.

(B) Includes $3.9 million of foreign currency gain in Q4 2001 and an $8.4 million gain in Q4 2000.

(C) Includes $11.6 million of foreign currency gain for fiscal year ended December 29, 2001 and a $7.0 million gain for fiscal year ended December 30, 2000.

 

 

Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)

Assets Year Ended
(Unaudited)
Dec 29, 2001
Dec. 30, 2000

Current Assets:
Cash and cash equivalents
Accounts receivable, net
Inventories
Deferred income taxes
Prepaid expenses and other assets


$326,027
47,998
61,132
6,472
2,921

$251,731
32,719
89,855
12,293
1,423
Total current assets 444,550 388,021
Property and equipment, net 70,086 64,704
Other assets 16,985 10,622
Total assets 531,621 463,347
Liabilities and Stockholder's Equity
   

Current liabilities:
Accounts payable
Salaries and benefits payable
Warranty reserve
Income taxes payable
Other accrued liabilities


18,837
3,308
3,914
13,132
6,348

22,496
3,441
5,228
5,795
5,081
Total current liabilities 45,539 42,041
Long-term debt 32,188 46,359
Deferred income taxes 504 9,616
Other liabilities - 92
Stockholder's equity:
Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss

1,078
125,630
366,588
(39,906)

1,082
133,925
253,140
(22,908)
Total stockholders' equity 453,390 365,239
Total liabilities and stockholders' equity $531,621 $463,347

 

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