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Garmin Reports Record First Quarter

CAYMAN ISLANDS/ May 1, 2002 /PRNewswire/ — Garmin Ltd. (Nasdaq: GRMN) today announced record revenue and net income for its first fiscal quarter ended March 30, 2002. Revenue for the quarter increased 18 percent to $100.9 million from $85.5 million in the year-ago quarter. Net income increased to $26.8 million, or $0.25 diluted earnings per share, compared to $23.8 million or $0.22 diluted earnings per share in the year-ago quarter. First quarter net income included a $0.7 million foreign currency loss as a result of a weaker U.S. dollar compared to the New Taiwan dollar. Excluding the foreign currency loss, the diluted EPS for the quarter was $0.25. The diluted EPS of $0.25 recorded for the first quarter of 2002 was in-line with company guidance of $0.23 to $0.25.

"We are pleased to announce another quarter of growth and to report that demand for Garmin products remains strong as we begin our thirteenth year of operations," said Dr. Min Kao, co-CEO and co-chairman of Garmin Ltd. "Our consumer segment recorded a 28 percent growth in revenues as we continue to experience strength in our recreational land, marine, and automotive product lines. This level of growth is attributed to the exciting new consumer products that we introduced last year, especially our new line of marine products that have been well received by the market. We also experienced a 13 percent sequential revenue increase in our aviation segment signaling a modest recovery in the general aviation market. The introduction of six new products during the quarter has enabled us to remain on track to introduce 25 new products for the year as we continue to maintain momentum going into the second quarter."

Revenue growth increased across all geographic regions during the first quarter of fiscal 2002 when compared to the year-ago quarter:

  • North America revenue was $73.1 million compared to $60.8 million, up 20 percent.
  • Europe revenue was $23.7 million compared to $20.8 million, up 14 percent.
  • Asia revenue was $4.1 million compared to $3.9 million, up 5 percent.

"We are experiencing a return on our investment in the higher-end products that were released last year as product average selling prices increased 22 percent for the first quarter when compared to last year," said Kevin Rauckman, chief financial officer of Garmin Ltd. "We continue to invest in the future as R&D increased 27 percent for the quarter, which is in-line with our 25 to 30 percent estimated R&D growth rate for the year. Inventory levels decreased $7.4 million, we reduced debt by $2.9 million, and free cash flow generated during the quarter was $45.4 million as ending cash and investments increased to $366.4 million. Our US subsidiary, Garmin International, Inc., will purchase on May 1, 2002, all $9.3 million of its outstanding industrial revenue bonds issued in 1995 (City of Olathe, Kansas, Industrial Revenue Bonds, Garmin International Project, Series 1995) in order to reduce our long-term debt. The bond purchase is a strategic move to re-deploy a portion of our excess capital to increase return."

Second Fiscal Quarter 2002 Outlook
The company estimates that its diluted EPS for the second fiscal quarter of 2002, excluding effects for foreign currency, will be in the range of $0.28 to $0.30 on revenues between $109.0 million to $114.0 million.

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

When: Wednesday, May 1, 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 800-377-5367.

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 11843982. An archive of the live webcast will be available until May 31, 2002 on the Garmin website at 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 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 29, 2001 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2001 Form 10-K can be downloaded from

Through its operating subsidiaries, Garmin Ltd. designs, manufactures, and markets navigation, communications and information devices, most of which are enabled by GPS technology. Garmin is a leader in the general aviation and consumer 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 or contact the Investor Relations department at 913-397-8200.

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

  13 Weeks Ended

March 30 , 2002

March 31 , 2001
Net sales $100,856 $85,534
Cost of goods sold 46,364 39,616
Gross profit 54,492 45,918
Selling, general and administrative expenses 11,239 9,259
Research and development expenses 7,973 6,296
  19,212 15,555
Operating income 35,280 30, 363
Other income (expense) (A) 592 1, 538
Income before income taxes 35,872 31,901
Income tax provision 9,111 8,102
Net income $26,761 $23,799

Net income per share:






Weighted average common shares outstanding:






(A) Includes $0.7 million of foreign currency loss in Q1 2002 and $1.1 million loss in Q1 2001.


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

Assets (Unaudited)
March 30, 2002
Dec. 29, 2001

Current Assets:

Cash and cash equivalents
Marketable Securities
Accounts receivable, net
Deferred income taxes
Prepaid expenses and other current assets





Total current assets 367,065 352,735
Property and equipment, net 72,106 70,086

Restricted cash
Marketable securities

Other assets, net

Total assets 569,479 532,155
Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable
Salaries and benefits payable
Warranty reserve
Income taxes payable
Current portion of long-term debt
Other accrued expenses





Total current liabilities 58,183 49,028
Long-term debt
Deferred income taxes
Other liabilities



Stockholders' equity:

Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss


Total stockholders' equity 481,655 453,969
Total liabilities and stockholders' equity $569,479 $532,155


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