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November 1, 2001

Garmin® Reports Third Quarter Earnings of $0.23 Per Share

CAYMAN ISLANDS, Nov. 1, 2001 /PRNewswire/ -- Garmin Ltd today announced EPS of $0.23 for its third fiscal quarter ended Sept. 29, 2001, which is two cents above the high end of its revised guidance of $0.20 to $0.21. This compares to $0.26 per share on a proforma basis in the year-ago quarter. Revenue was $86.9 million for its third fiscal quarter ended Sept. 29, 2001 -- down 3 percent from the $89.5 million generated in the year-ago quarter. Net income for the third quarter of fiscal 2001 was $25.0 million compared to $28.3 million in the year-ago quarter.

Third quarter 2001 net income included a $0.3 million foreign currency gain as a result of a stronger U.S. dollar compared to the New Taiwan dollar. Excluding the foreign currency gain, EPS for the quarter was $0.23.

Consumer revenue totaled $64.1 million -- a 9 percent growth compared to the third quarter of 2000. Aviation revenue totaled $22.8 million -- a 26 percent decline compared to the year-ago quarter. Total units sold for the quarter increased to 311,000 from 298,000 in 2000 -- representing an increase of 4 percent compared to the year-ago quarter.

"We are pleased with the level of revenue and unit growth within the consumer segment given the difficult economic environment," said Gary Burrell, co-CEO and co-chairman of Garmin Ltd. "The increase in the consumer segment in this market environment further evidences the continued growth of the GPS market and is a tribute to the popularity of Garmin products among marine, recreational, business and automotive users around the world. However, there have been challenges within the aviation segment due to the overall weak economy and recent restrictions on U.S. airspace that occurred after Sept. 11. We believe that the general aviation industry will gradually return to normal levels as the FAA continues to ease restrictions on VFR flights. There is reason to believe that the additional cost, inconvenience and delays resulting from tightened commercial airline security and reduction of scheduled flights will have a positive long-term benefit relative to the efficiency and convenience of travel on general aviation aircraft. According to the most recent market report published by the Aircraft Electronics Association, Garmin remains well positioned in the U.S. general aviation retrofit GPS market, with unit volume market share of 73 percent for GPS panel-mount products and 90 percent for portable aviation GPS products."

Revenue for the nine-month year-to-date period ended Sept. 29, 2001 was $276.1 million -- up 6 percent from the $260.1 million generated in the year-ago period. Net income increased 9 percent for the period to $85.4 million, or $0.79 per share, compared to $78.1 million or $0.72 per share on a proforma basis in the year-ago period.

Net income for the nine-month period ended September 29, 2001 included a $7.7 million foreign currency gain as a result of a stronger U.S. dollar compared to the New Taiwan Dollar. Excluding the foreign currency gain, EPS for the period was $0.73.

Consumer revenue totaled $193.5 million -- a 12 percent growth compared to the prior period. Aviation revenue totaled $82.6 million -- a 5 percent decline compared to the year-ago period. Total units sold for the nine-month period increased to 993,000 from 883,000 in 2000 -- representing an increase of 12 percent so far this year.

"During the third fiscal quarter, gross margin increased sequentially compared to the second fiscal quarter, from 53 percent to 55 percent due to changes in product mix and our continuous improvement in manufacturing efficiencies," said Kevin Rauckman, chief financial officer of Garmin Ltd. "We continue to generate significant cash flow, as net cash flow increased to $61.3 million as of the year-to-date period ended Sept. 29, 2001 compared to $31.9 million in the year-ago period. We also continue to manage inventory levels as inventory decreased by $24.0 million since fiscal year-end 2000."

Earnings Call Information

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

When: Thursday, Nov. 1, 2001 at 11:00 a.m. Eastern

Where: event 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 10149840. An archive of the live webcast will be available until November 15, 2001 on the Garmin website. To access the replay, click on Investor Relations, then Events Calendar.

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.

Through its operating subsidiaries, Garmin Ltd. designs and manufactures navigation, communication and information electronics. The company's primary markets are aviation, marine, outdoor recreation, automotive, wireless and OEM. 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.

 

Garmin Ltd. And Subsidiaries

Condensed Consolidated Statements of Income (In thousands, except per share information)

  Three Months Ended
(Unaudited)
September 29, 2001
September 23, 2000
Net sales $86,930 $89,539
Cost of goods sold 39,201 40,508
Gross profit 47,729 49,031
Selling, general, and administrative expense 9,663 8,603
Research and development expense 7,306 5,755
  16,969 14,358
Operating income 30,760 34,673
Other income (expense) (A) 2,742 2,360
Income before income taxes 33,502 37,033
Income tax provision 8,501 9,010
Net income $36,603 8,741

Net income per share:

Basic
Diluted


$ 0.23
$ 0.23

$ 0.28
$ 0.28

Weighted average common shares outstanding:

Basic
Diluted


108,232
108,599

100,000
100,000

(A) Includes $0.3 million of foreign currency gain in Q3 2001 and a $1.6 million gain in Q3 2000.

 

Garmin Ltd. And Subsidiaries

Condensed Consolidated Statements of Income (In thousands, except per share information)

  Nine Months Ended
(Unaudited)
September 29, 2001
September 23, 2000
Net sales $276,098 $260,079
Cost of goods sold 127,401 119,110
Gross profit 148,697 140,969
Selling, general, and administrative expense 28,723 23,678
Research and development expense 20,367 15,474
  49,090 39,152
Operating income 99,607 101,817
Other income (expense) (A) 14,862 351
Income before income taxes 114,469 102,168
Income tax provision 29,066 24,116
Net income $85,403 $78,052

Net income per share:

Basic
Diluted


$ 0.79
$ 0.79


$ 0.78
$ 0.78

Weighted average common shares outstanding:

Basic
Diluted


108,239
108,621

100,000
100,000

(A) Includes $7.7 million of foreign currency gain for the nine-month period ended September 29, 2001 and a $1.4 million loss for the nine-month period ended September 23, 2000.

 

 

 

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

Assets  
J(Unaudited)
September 29, 2001
September 23, 2000

Current assets:

Cash and cash equivalents
Accounts receivable
Inventories
Deferred income taxes
Prepaid expenses and other current assets


$313,269
43,190
65,840
11,719
5,447

$251,731
32,719
89,855
12,293
1,423
Total current assets 439,465 388,021
Property and equipment, net 68,790 64,704
Other assets, net 21,206 10,622
Total assets $529,461 $463,347
Liabilities and Stockholders' Equity
   

Current liabilities:

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


$14,662
3,314
4,696
14,529
6,202

$22,496
3,441
5,228
5,795
5,081
Total current liabilities 43,403 42,041
Long-term debt 35,544 46,359
Deferred income taxes 8,216 9,616
Other liabilities 1,021 92

Stockholders' equity:

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


1,082
133,925
338,396
(32,126)

1,082
133,925
253,140
(22,908)
Total stockholders' equity 441,277 365,239
Total liabilities and stockholders' equity $529,461 $463,347

Source: Garmin Ltd.
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