Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)
| |
|
(Unaudited)
|
|
|
|
|
| |
|
March 26,
|
|
|
December 25,
|
|
| |
|
2011
|
|
|
2010
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
1,210,615 |
|
|
$ |
1,260,936 |
|
|
Marketable securities
|
|
|
41,723 |
|
|
|
24,418 |
|
|
Accounts receivable, net
|
|
|
434,935 |
|
|
|
747,249 |
|
|
Inventories, net
|
|
|
411,021 |
|
|
|
387,577 |
|
|
Deferred income taxes
|
|
|
33,582 |
|
|
|
33,628 |
|
|
Deferred costs
|
|
|
22,943 |
|
|
|
20,053 |
|
|
Prepaid expenses and other current assets
|
|
|
38,018 |
|
|
|
24,894 |
|
|
Total current assets
|
|
|
2,192,837 |
|
|
|
2,498,755 |
|
| |
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
427,110 |
|
|
|
427,805 |
|
| |
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
1,027,381 |
|
|
|
777,401 |
|
|
Restricted cash
|
|
|
1,389 |
|
|
|
1,277 |
|
|
Licensing agreements, net
|
|
|
4,658 |
|
|
|
1,800 |
|
|
Noncurrent deferred income tax
|
|
|
73,613 |
|
|
|
73,613 |
|
|
Noncurrent deferred costs
|
|
|
25,700 |
|
|
|
24,685 |
|
|
Other intangible assets, net
|
|
|
184,821 |
|
|
|
183,352 |
|
|
Total assets
|
|
$ |
3,937,509 |
|
|
$ |
3,988,688 |
|
| |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$ |
118,845 |
|
|
$ |
132,348 |
|
|
Salaries and benefits payable
|
|
|
34,811 |
|
|
|
49,288 |
|
|
Accrued warranty costs
|
|
|
44,030 |
|
|
|
49,885 |
|
|
Accrued sales program costs
|
|
|
49,463 |
|
|
|
107,261 |
|
|
Deferred revenue
|
|
|
104,818 |
|
|
|
89,711 |
|
|
Accrued royalty costs
|
|
|
7,769 |
|
|
|
95,086 |
|
|
Accrued advertising expense
|
|
|
17,626 |
|
|
|
21,587 |
|
|
Other accrued expenses
|
|
|
58,164 |
|
|
|
63,043 |
|
|
Deferred income taxes
|
|
|
4,428 |
|
|
|
4,800 |
|
|
Income taxes payable
|
|
|
29,959 |
|
|
|
56,028 |
|
|
Total current liabilities
|
|
$ |
469,913 |
|
|
$ |
669,037 |
|
| |
|
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
|
11,068 |
|
|
|
6,986 |
|
|
Non-current income taxes
|
|
|
147,047 |
|
|
|
153,621 |
|
|
Non-current deferred revenue
|
|
|
114,795 |
|
|
|
108,076 |
|
|
Other liabilities
|
|
|
1,457 |
|
|
|
1,406 |
|
| |
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Shares, CHF 10 par value, 208,077,418 shares authorized and issued; 194,014,900 shares outstanding at March 26, 2011; and 194,358,038 shares outstanding at December 25, 2010;
|
|
|
1,797,435 |
|
|
|
1,797,435 |
|
|
Additional paid-in capital
|
|
|
45,435 |
|
|
|
38,268 |
|
|
Treasury stock
|
|
|
(118,018 |
) |
|
|
(106,758 |
) |
|
Retained earnings
|
|
|
1,377,007 |
|
|
|
1,264,613 |
|
|
Accumulated other comprehensive income
|
|
|
91,370 |
|
|
|
56,004 |
|
|
Total stockholders' equity
|
|
|
3,193,229 |
|
|
|
3,049,562 |
|
|
Total liabilities and stockholders' equity
|
|
$ |
3,937,509 |
|
|
$ |
3,988,688 |
|
See accompanying notes.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
| |
|
13-Weeks Ended
|
|
| |
|
March 26,
|
|
|
March 27,
|
|
| |
|
2011
|
|
|
2010
|
|
|
Net sales
|
|
$ |
507,834 |
|
|
$ |
431,067 |
|
| |
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
269,460 |
|
|
|
200,158 |
|
| |
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
238,374 |
|
|
|
230,909 |
|
| |
|
|
|
|
|
|
|
|
|
Advertising expense
|
|
|
19,956 |
|
|
|
17,400 |
|
|
Selling, general and administrative expense
|
|
|
73,187 |
|
|
|
67,678 |
|
|
Research and development expense
|
|
|
70,478 |
|
|
|
62,483 |
|
|
Total operating expense
|
|
|
163,621 |
|
|
|
147,561 |
|
| |
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
74,753 |
|
|
|
83,348 |
|
| |
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
7,214 |
|
|
|
6,879 |
|
|
Foreign currency gains (losses)
|
|
|
12,140 |
|
|
|
(46,537 |
) |
|
Other
|
|
|
2,819 |
|
|
|
1,833 |
|
|
Total other income (expense)
|
|
|
22,173 |
|
|
|
(37,825 |
) |
| |
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
96,926 |
|
|
|
45,523 |
|
| |
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
1,444 |
|
|
|
8,194 |
|
| |
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
95,482 |
|
|
$ |
37,329 |
|
| |
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ |
0.49 |
|
|
$ |
0.19 |
|
|
Diluted
|
|
$ |
0.49 |
|
|
$ |
0.19 |
|
| |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
193,922 |
|
|
|
199,926 |
|
|
Diluted
|
|
|
194,720 |
|
|
|
201,091 |
|
| |
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
|
- |
|
|
$ |
1.50 |
|
See accompanying notes.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
| |
|
13-Weeks Ended
|
|
| |
|
March 26,
|
|
|
March 27,
|
|
| |
|
2011
|
|
|
2010
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
|
$ |
95,482 |
|
|
$ |
37,329 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
13,839 |
|
|
|
13,543 |
|
|
Amortization
|
|
|
8,583 |
|
|
|
8,334 |
|
|
Gain on sale of property and equipment
|
|
|
(2 |
) |
|
|
(6 |
) |
|
Provision for doubtful accounts
|
|
|
(858 |
) |
|
|
(1,260 |
) |
|
Deferred income taxes
|
|
|
1,023 |
|
|
|
(1,546 |
) |
|
Unrealized foreign currency losses
|
|
|
867 |
|
|
|
47,773 |
|
|
Provision for obsolete and slow moving inventories
|
|
|
(4,349 |
) |
|
|
3,140 |
|
|
Stock compensation expense
|
|
|
8,666 |
|
|
|
9,700 |
|
|
Realized gains on marketable securities
|
|
|
(1,492 |
) |
|
|
(805 |
) |
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
327,151 |
|
|
|
436,446 |
|
|
Inventories
|
|
|
(11,067 |
) |
|
|
(50,168 |
) |
|
Other current assets
|
|
|
(20,372 |
) |
|
|
2,146 |
|
|
Accounts payable
|
|
|
(17,573 |
) |
|
|
(94,717 |
) |
|
Other current and non-current liabilities
|
|
|
(190,770 |
) |
|
|
(216,868 |
) |
|
Deferred revenue
|
|
|
21,826 |
|
|
|
14,286 |
|
|
Deferred cost
|
|
|
(3,905 |
) |
|
|
(2,752 |
) |
|
Income taxes payable
|
|
|
(16,550 |
) |
|
|
(4,048 |
) |
|
License fees
|
|
|
(2,900 |
) |
|
|
(396 |
) |
|
Net cash provided by operating activities
|
|
|
207,599 |
|
|
|
200,131 |
|
| |
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(7,178 |
) |
|
|
(3,935 |
) |
|
Purchase of intangible assets
|
|
|
(2,626 |
) |
|
|
(5,029 |
) |
|
Purchase of marketable securities
|
|
|
(363,263 |
) |
|
|
(74,303 |
) |
|
Redemption of marketable securities
|
|
|
98,614 |
|
|
|
146,073 |
|
|
Change in restricted cash
|
|
|
(112 |
) |
|
|
1,106 |
|
|
Net cash (used in)/provided by investing activities
|
|
|
(274,565 |
) |
|
|
63,912 |
|
| |
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock through stock purchase plan
|
|
|
3,041 |
|
|
|
2,725 |
|
|
Stock repurchase
|
|
|
- |
|
|
|
(47,206 |
) |
|
Tax benefit related to stock option exercise
|
|
|
787 |
|
|
|
1,408 |
|
|
Net cash provided by/(used in) financing activities
|
|
|
3,828 |
|
|
|
(43,073 |
) |
| |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
12,817 |
|
|
|
(21,208 |
) |
| |
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents
|
|
|
(50,321 |
) |
|
|
199,762 |
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,260,936 |
|
|
|
1,091,581 |
|
|
Cash and cash equivalents at end of period
|
|
$ |
1,210,615 |
|
|
$ |
1,291,343 |
|
See accompanying notes.
Garmin Ltd. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 26, 2011
(In thousands, except share and per share information)
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the 13-week period ended March 26, 2011 is not necessarily indicative of the results that may be expected for the year ending December 31, 2011.
The condensed consolidated balance sheet at December 25, 2010 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 25, 2010.
The Company’s fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year. Therefore the financial results of certain fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13-weeks. The quarters ended March 26, 2011 and March 27, 2010 both contain operating results for 13-weeks.
The components of inventories consist of the following:
| |
|
March 26, 2011
|
|
|
December 25, 2010
|
|
| |
|
|
|
|
|
|
|
Raw Materials
|
|
$ |
135,277 |
|
|
$ |
103,277 |
|
|
Work-in-process
|
|
|
42,207 |
|
|
|
43,507 |
|
|
Finished goods
|
|
|
264,761 |
|
|
|
278,513 |
|
|
Inventory Reserves
|
|
|
(31,224 |
) |
|
|
(37,720 |
) |
|
Inventory, net of reserves
|
|
$ |
411,021 |
|
|
$ |
387,577 |
|
The Board of Directors approved a share repurchase program on February 12, 2010, authorizing the Company to purchase up to $300,000 of its common shares as market and business conditions warrant on the open market or in negotiated transactions in compliance with the SEC’s Rule 10b-18. The share repurchase authorization expires on December 31, 2011. As of March 26, 2011, the Company had repurchased 7,366,646 shares using cash of $223,149 with all purchases made prior to fiscal 2011. There remains approximately $76,851 available for repurchase under this authorization.
In addition, 522,856 shares repurchased for $16,723 prior to the Company’s redomestication to Switzerland on June 27, 2010, but for which transactions settled after that date, were treated as retired when such shares were still in treasury. These shares are reflected as additional treasury shares during the 13-weeks ended March 26, 2011 with a corresponding increase to retained earnings.
The following table sets forth the computation of basic and diluted net income per share:
| |
|
13-Weeks Ended
|
|
| |
|
March 26,
|
|
|
March 27,
|
|
| |
|
2011
|
|
|
2010
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Numerator for basic and diluted net income per share - net income
|
|
$ |
95,482 |
|
|
$ |
37,329 |
|
| |
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Denominator for basic net income per share –weighted-average common shares
|
|
|
193,922 |
|
|
|
199,926 |
|
| |
|
|
|
|
|
|
|
|
|
Effect of dilutive securities – employee stock options and stock appreciation rights
|
|
|
798 |
|
|
|
1,165 |
|
| |
|
|
|
|
|
|
|
|
|
Denominator for diluted net income per share –adjusted weighted-average common shares
|
|
|
194,720 |
|
|
|
201,091 |
|
| |
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$ |
0.49 |
|
|
$ |
0.19 |
|
| |
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$ |
0.49 |
|
|
$ |
0.19 |
|
| |
|
|
|
|
|
|
|
|
There were 6,048,590 anti-dilutive options for the 13-week period ended March 26, 2011. There were 6,239,755 anti-dilutive options for the 13-week period ended March 27, 2010.
There were 179,371 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended March 26, 2011. There were 291,714 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended March 27, 2010.
Comprehensive income is comprised of the following:
| |
|
13-Weeks Ended
|
|
| |
|
March 26,
|
|
|
March 27,
|
|
| |
|
2011
|
|
|
2010
|
|
|
Net income
|
|
$ |
95,482 |
|
|
$ |
37,329 |
|
|
Translation adjustment
|
|
|
32,752 |
|
|
|
8,039 |
|
|
Change in fair value of available-for-sale marketable securities, net of deferred taxes
|
|
|
2,614 |
|
|
|
6,364 |
|
|
Comprehensive income
|
|
$ |
130,848 |
|
|
$ |
51,732 |
|
Beginning in 2011, for external reporting purposes, the Company has identified five operating segments – Auto/Mobile, Aviation, Marine, Outdoor and Fitness. Each operating segment is individually reviewed and evaluated by our Chief Operating Decision Maker, who allocates resources and assesses performance of each segment individually. Prior to 2011, the Outdoor and Fitness operating segments were combined into a single reportable segment due to the similar nature of those products, their production processes, the types of customers served, their distribution processes, and similar economic conditions. Management re-evaluated the combination of these operating segments and determined that based on the growth of these segments they should now be reported as two distinct reportable segments.
Net sales, operating income, and income before taxes for each of the Company’s reportable segments are presented below:
| |
|
Reportable Segments
|
|
| |
|
|
|
|
|
|
|
|
|
|
Auto/
|
|
|
|
|
|
|
|
| |
|
Outdoor
|
|
|
Fitness
|
|
|
Marine
|
|
|
Mobile
|
|
|
Aviation
|
|
|
Total
|
|
|
13-Weeks Ended March 26, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ |
66,450 |
|
|
$ |
56,367 |
|
|
$ |
51,308 |
|
|
$ |
264,550 |
|
|
$ |
69,159 |
|
|
$ |
507,834 |
|
|
Operating income
|
|
$ |
24,807 |
|
|
$ |
15,457 |
|
|
$ |
15,133 |
|
|
$ |
1,595 |
|
|
$ |
17,761 |
|
|
$ |
74,753 |
|
|
Income before taxes
|
|
$ |
28,187 |
|
|
$ |
18,497 |
|
|
$ |
18,430 |
|
|
$ |
11,656 |
|
|
$ |
20,156 |
|
|
$ |
96,926 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks Ended March 27, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ |
59,386 |
|
|
$ |
43,350 |
|
|
$ |
41,314 |
|
|
$ |
220,924 |
|
|
$ |
66,093 |
|
|
$ |
431,067 |
|
|
Operating income
|
|
$ |
24,369 |
|
|
$ |
14,199 |
|
|
$ |
8,929 |
|
|
$ |
16,982 |
|
|
$ |
18,869 |
|
|
$ |
83,348 |
|
|
Income/(loss) before taxes
|
|
$ |
20,106 |
|
|
$ |
11,059 |
|
|
$ |
6,628 |
|
|
$ |
(10,256 |
) |
|
$ |
17,986 |
|
|
$ |
45,523 |
|
Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis.
Net sales and property and equipment, net by geographic area are as follows as of and for the 13-week periods ended March 26, 2011 and March 27, 2010:
| |
|
North
|
|
|
|
|
|
|
|
|
|
|
| |
|
America
|
|
|
Asia
|
|
|
Europe
|
|
|
Total
|
|
|
March 26, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales to external customers
|
|
$ |
279,967 |
|
|
$ |
57,127 |
|
|
$ |
170,740 |
|
|
$ |
507,834 |
|
|
Long lived assets
|
|
$ |
231,021 |
|
|
$ |
146,425 |
|
|
$ |
49,664 |
|
|
$ |
427,110 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 27, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales to external customers
|
|
$ |
243,407 |
|
|
$ |
42,683 |
|
|
$ |
144,977 |
|
|
$ |
431,067 |
|
|
Long lived assets
|
|
$ |
230,072 |
|
|
$ |
150,682 |
|
|
$ |
51,852 |
|
|
$ |
432,606 |
|
The Company’s products sold are generally covered by a warranty for periods ranging from one to three years. The Company’s estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet. The following reconciliation provides an illustration of changes in the aggregate warranty reserve.
| |
|
13-Weeks Ended
|
|
| |
|
March 26,
|
|
|
March 27,
|
|
| |
|
2011
|
|
|
2010
|
|
| |
|
|
|
|
|
|
|
Balance - beginning of the period
|
|
$ |
49,885 |
|
|
$ |
87,424 |
|
|
Accrual for products sold during the period
|
|
|
20,391 |
|
|
|
14,914 |
|
|
Expenditures
|
|
|
(26,246 |
) |
|
|
(21,748 |
) |
|
Change in accrual for products sold in prior periods
|
|
|
- |
|
|
|
(21,776 |
) |
|
Balance - end of the period
|
|
$ |
44,030 |
|
|
$ |
58,814 |
|
The 13-weeks ended March 27, 2010 include the effect of a change in estimate in the warranty reserves which decreased the accrual for the period by $21,776.
8. Income Taxes
Our earnings before taxes increased 113% when compared to the same quarter in 2010, while our income tax expense decreased by $6,750, to $1,444 for the 13-week period ended March 26, 2011, from $8,194 for the 13-week period ended March 27, 2010. The effective tax rate was 1.5% in the first quarter of 2011 and 18.0% in the first quarter of 2010. The change in the effective tax rate was primarily driven by the release of reserves related to the expiration of certain statutes for Garmin and lower U.S reserves provided in 2011 following favorable audits in both 2010 and 2011.
9. Fair Value Measurements
The Accounting Standards Codification (ASC) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The ASC classifies the inputs used to measure fair value into the following hierarchy:
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liability
|
|
Level 2
|
Unadjusted quoted prices in active markets for similar assets or liabilities
|
|
Level 3
|
Unobservable inputs for the asset or liability
|
The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
For fair value measurements using significant unobservable inputs, an independent third party provided the valuation. The collateral composition was used to estimate weighted average life based on historical and projected payment information. Cash flows were projected for the issuing trusts, taking into account underlying loan principal, bonds outstanding, and payout formulas. Taking this information into account, assumptions were made as to the yields likely to be required, based upon then current market conditions for comparable or similar term asset based securities as well as other fixed income securities.
Assets and liabilities measured at estimated fair value on a recurring basis are summarized below:
| |
|
Fair Value Measurements as of March 26, 2011
|
|
|
Description
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Available for-sale securities
|
|
$ |
1,048,552 |
|
|
$ |
1,048,552 |
|
|
$ |
- |
|
|
$ |
- |
|
|
Failed Auction rate securities
|
|
|
20,552 |
|
|
|
- |
|
|
|
- |
|
|
|
20,552 |
|
|
Total
|
|
$ |
1,069,104 |
|
|
$ |
1,048,552 |
|
|
$ |
- |
|
|
$ |
20,552 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fair Value Measurements as of December 25, 2010
|
|
|
Description
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Available for-sale securities
|
|
$ |
781,257 |
|
|
$ |
781,257 |
|
|
$ |
- |
|
|
$ |
- |
|
|
Failed Auction rate securities
|
|
|
20,562 |
|
|
|
- |
|
|
|
- |
|
|
|
20,562 |
|
|
Total
|
|
$ |
801,819 |
|
|
$ |
781,257 |
|
|
$ |
- |
|
|
$ |
20,562 |
|
All Level 3 investments have been in a continuous unrealized loss position for 12 months or longer. However, it is the Company’s intent to hold these securities until they recover their value. For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, the ASC requires a reconciliation of the beginning and ending balances, separately for each major category of assets. The reconciliation is as follows:
| |
|
Fair Value Measurements Using
Significant Unobservable Inputs
(Level 3)
|
|
| |
|
13 weeks Ended March 26, 2011
|
|
|
Beginning balance of auction rate securities
|
|
$ |
20,562 |
|
|
Purchases in and/or sales out of Level 3
|
|
|
(250 |
) |
|
Total unrealized gains/(losses) included in other comprehensive income
|
|
|
240 |
|
|
Transfers in and/or out of Level 3
|
|
|
- |
|
|
Ending balance of auction rate securities
|
|
$ |
20,552 |
|
The following is a summary of the company’s marketable securities classified as available-for-sale securities at March 26, 2011:
| |
|
Amortized Cost
|
|
|
Gross Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Other Than
Temporary
Impairment
|
|
|
Estimated Fair
Value (Net
Carrying
Amount)
|
|
|
Mortgage-backed securities
|
|
$ |
601,784 |
|
|
$ |
2,838 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
604,622 |
|
|
Auction Rate Securities
|
|
|
25,423 |
|
|
|
- |
|
|
|
(4,871 |
) |
|
|
- |
|
|
|
20,552 |
|
|
Obligations of states and political subdivisions
|
|
|
316,081 |
|
|
|
626 |
|
|
|
(3,622 |
) |
|
|
- |
|
|
|
313,085 |
|
|
U.S. corporate bonds
|
|
|
88,962 |
|
|
|
1,241 |
|
|
|
(204 |
) |
|
|
(1,274 |
) |
|
|
88,725 |
|
|
Other
|
|
|
39,587 |
|
|
|
2,533 |
|
|
|
- |
|
|
|
- |
|
|
|
42,120 |
|
|
Total
|
|
$ |
1,071,837 |
|
|
$ |
7,238 |
|
|
$ |
(8,697 |
) |
|
$ |
(1,274 |
) |
|
$ |
1,069,104 |
|
The following is a summary of the company’s marketable securities classified as available-for-sale securities at December 25, 2010:
| |
|
Amortized Cost
|
|
|
Gross Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Other Than
Temporary
Impairment
|
|
|
Estimated Fair
Value (Net
Carrying
Amount)
|
|
|
Mortgage-backed securities
|
|
$ |
527,249 |
|
|
$ |
1,913 |
|
|
$ |
(1,520 |
) |
|
$ |
- |
|
|
$ |
527,642 |
|
|
Auction Rate Securities
|
|
|
25,599 |
|
|
|
- |
|
|
|
(5,037 |
) |
|
|
- |
|
|
|
20,562 |
|
|
Obligations of states and political subdivisions
|
|
|
160,618 |
|
|
|
347 |
|
|
|
(3,340 |
) |
|
|
- |
|
|
|
157,625 |
|
|
U.S. corporate bonds
|
|
|
54,348 |
|
|
|
637 |
|
|
|
(185 |
) |
|
|
(1,274 |
) |
|
|
53,526 |
|
|
Other
|
|
|
39,838 |
|
|
|
2,626 |
|
|
|
- |
|
|
|
- |
|
|
|
42,464 |
|
|
Total
|
|
$ |
807,652 |
|
|
$ |
5,523 |
|
|
$ |
(10,082 |
) |
|
$ |
(1,274 |
) |
|
$ |
801,819 |
|
The cost of securities sold is based on the specific identification method.
The amortized cost and estimated fair value of marketable securities at March 26, 2011, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
| |
|
|
|
|
Estimated
|
|
| |
|
Cost
|
|
|
Fair Value
|
|
| |
|
|
|
|
|
|
|
Due in one year or less
|
|
$ |
41,377 |
|
|
$ |
41,722 |
|
|
Due after one year through five years
|
|
|
359,637 |
|
|
|
360,035 |
|
|
Due after five years through ten years
|
|
|
273,169 |
|
|
|
268,983 |
|
|
Due after ten years
|
|
|
362,909 |
|
|
|
361,450 |
|
|
Other (No contractual maturity dates)
|
|
|
34,744 |
|
|
|
36,914 |
|
| |
|
$ |
1,071,836 |
|
|
$ |
1,069,104 |
|
10. Subsequent Events
On April 26, 2011, Garmin Ltd. announced its intent to acquire Garmin Distribution Africa (Pty) Ltd. (GDA), the distributor of Garmin’s automotive, outdoor recreation, fitness and marine products in Southern Africa. This acquisition is not expected to be material.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The discussion set forth below, as well as other portions of this Quarterly Report, contains statements concerning potential future events. Such forward-looking statements are based upon assumptions by our management, as of the date of this Quarterly Report, including assumptions about risks and uncertainties faced by the Company. Readers can identify these forward-looking statements by their use of such verbs as expects, anticipates, believes or similar verbs or conjugations of such verbs. If any of our assumptions prove incorrect or should unanticipated circumstances arise, our actual results could materially differ from those anticipated by such forward-looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited to, those factors identified in the Company’s Annual Report on Form 10-K for the year ended December 25, 2010. This report has been filed with the Securities and Exchange Commission (the "SEC" or the "Commission") in Washington, D.C. and can be obtained by contacting the SEC's public reference operations or obtaining it through the SEC's web site on the World Wide Web at http://www.sec.gov. Readers are strongly encouraged to consider those factors when evaluating any forward-looking statement concerning the Company. The Company will not update any forward-looking statements in this Quarterly Report to reflect future events or developments.
The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in this Form 10-Q and the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 25, 2010.
The Company is a leading worldwide provider of navigation, communications and information devices, most of which are enabled by Global Positioning System, or GPS, technology. We operate in five business segments, the outdoor, fitness, marine, automotive/mobile and aviation markets. Our segments offer products through our network of independent dealers and distributors. However, the nature of products and types of customers for the five segments may vary significantly. As such, the segments are managed separately.
Results of Operations
The following table sets forth our results of operations as a percentage of net sales during the periods shown:
| |
|
13-Weeks Ended
|
|
| |
|
March 26, 2011
|
|
|
March 27, 2010
|
|
| |
|
|
|
|
|
|
|
Net sales
|
|
|
100 |
% |
|
|
100 |
% |
|
Cost of goods sold
|
|
|
53 |
% |
|
|
46 |
% |
|
Gross profit
|
|
|
47 |
% |
|
|
54 |
% |
|
Advertising
|
|
|
4 |
% |
|
|
4 |
% |
|
Selling, general and administrative
|
|
|
14 |
% |
|
|
16 |
% |
|
Research and development
|
|
|
14 |
% |
|
|
15 |
% |
|
Total operating expenses
|
|
|
32 |
% |
|
|
35 |
% |
|
Operating income
|
|
|
15 |
% |
|
|
19 |
% |
|
Other income (expense), net
|
|
|
4 |
% |
|
|
-8 |
% |
|
Income before income taxes
|
|
|
19 |
% |
|
|
11 |
% |
|
Provision for income taxes
|
|
|
0 |
% |
|
|
2 |
% |
|
Net income
|
|
|
19 |
% |
|
|
9 |
% |
The Company manages its operations in five segments: outdoor, fitness, marine, automotive/mobile, and aviation, and each of its segments employs the same accounting policies. Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis. The following table sets forth our results of operations (in thousands) including revenue (net sales), operating income, and income before taxes for each of our five segments during the periods shown. For each line item in the table, the total of the outdoor, fitness, marine, automotive/mobile, and aviation segments' amounts equals the amount in the condensed consolidated statements of income included in Item 1.
| |
|
Reportable Segments
|
|
| |
|
|
|
|
|
|
|
|
|
|
Auto/
|
|
|
|
|
|
|
|
| |
|
Outdoor
|
|
|
Fitness
|
|
|
Marine
|
|
|
Mobile
|
|
|
Aviation
|
|
|
Total
|
|
|
13-Weeks Ended March 26, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ |
66,450 |
|
|
$ |
56,367 |
|
|
$ |
51,308 |
|
|
$ |
264,550 |
|
|
$ |
69,159 |
|
|
$ |
507,834 |
|
|
Operating income
|
|
$ |
24,807 |
|
|
$ |
15,457 |
|
|
$ |
15,133 |
|
|
$ |
1,595 |
|
|
$ |
17,761 |
|
|
$ |
74,753 |
|
|
Income before taxes
|
|
$ |
28,187 |
|
|
$ |
18,497 |
|
|
$ |
18,430 |
|
|
$ |
11,656 |
|
|
$ |
20,156 |
|
|
$ |
96,926 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks Ended March 27, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ |
59,386 |
|
|
$ |
43,350 |
|
|
$ |
41,314 |
|
|
$ |
220,924 |
|
|
$ |
66,093 |
|
|
$ |
431,067 |
|
|
Operating income
|
|
$ |
24,369 |
|
|
$ |
14,199 |
|
|
$ |
8,929 |
|
|
$ |
16,982 |
|
|
$ |
18,869 |
|
|
$ |
83,348 |
|
|
Income/(loss) before taxes
|
|
$ |
20,106 |
|
|
$ |
11,059 |
|
|
$ |
6,628 |
|
|
$ |
(10,256 |
) |
|
$ |
17,986 |
|
|
$ |
45,523 |
|
Comparison of 13-Weeks Ended March 26, 2011 and March 27, 2010
(Amounts included in the following discussion are stated in thousands unless otherwise indicated)
Net Sales
| |
|
13-weeks ended March 26, 2011
|
|
|
13-weeks ended March 27, 2010
|
|
|
Quarter over Quarter
|
|
| |
|
Net Sales
|
|
|
% of Revenues
|
|
|
Net Sales
|
|
|
% of Revenues
|
|
|
$ Change
|
|
|
% Change
|
|
|
Outdoor
|
|
$ |
66,450 |
|
|
|
13 |
% |
|
$ |
59,386 |
|
|
|
14 |
% |
|
$ |
7,064 |
|
|
|
12 |
% |
|
Fitness
|
|
|
56,367 |
|
|
|
11 |
% |
|
|
43,350 |
|
|
|
10 |
% |
|
|
13,017 |
|
|
|
30 |
% |
|
Marine
|
|
|
51,308 |
|
|
|
10 |
% |
|
|
41,314 |
|
|
|
10 |
% |
|
|
9,994 |
|
|
|
24 |
% |
|
Automotive/Mobile
|
|
|
264,550 |
|
|
|
52 |
% |
|
|
220,924 |
|
|
|
51 |
% |
|
|
43,626 |
|
|
|
20 |
% |
|
Aviation
|
|
|
69,159 |
|
|
|
14 |
% |
|
|
66,093 |
|
|
|
15 |
% |
|
|
3,066 |
|
|
|
5 |
% |
|
Total
|
|
$ |
507,834 |
|
|
|
100 |
% |
|
$ |
431,067 |
|
|
|
100 |
% |
|
$ |
76,767 |
|
|
|
18 |
% |
Net sales increased 18% for the 13-week period ended March 26, 2011 when compared to the year-ago quarter. The increase occurred in all segments with the largest percentage gains in fitness and marine. Automotive/mobile revenue remains the largest portion of our revenue mix at 52% in the first quarter of 2011 compared to 51% in the first quarter of 2010.
Total unit sales increased 18% to 2,525 in the first quarter of 2011 from 2,137 in the same period of 2010. The increase in unit sales volume in the first quarter of fiscal 2011 was attributable to increasing volumes in all segments excluding aviation. The greatest percentage increase occurred in fitness.
Automotive/mobile segment revenue increased 20% from the year-ago quarter, as volumes increased 18% and the average selling price (ASP) increased 1% due to the mix of products sold. Revenue growth was primarily driven by sales to auto original equipment manufacturers (OEMs), mobile handset inventories and slight growth in portable navigation devices (PNDs). Revenues in our fitness segment increased 30% from the year-ago quarter on the strength of recent product introductions that expand the addressable market and ongoing global penetration in the segment. Marine revenues increased 24% from the year-ago quarter as the Company began shipping to new OEM partners ahead of the boating season.
Cost of Goods Sold
| |
|
13-weeks ended March 26, 2011
|
|
|
13-weeks ended March 27, 2010
|
|
|
Quarter over Quarter
|
|
| |
|
COGS
|
|
|
% of Revenues
|
|
|
COGS
|
|
|
% of Revenues
|
|
|
$ Change
|
|
|
% Change
|
|
|
Outdoor
|
|
$ |
25,097 |
|
|
|
38 |
% |
|
$ |
20,876 |
|
|
|
35 |
% |
|
$ |
4,221 |
|
|
|
20 |
% |
|
Fitness
|
|
|
22,575 |
|
|
|
40 |
% |
|
|
16,299 |
|
|
|
38 |
% |
|
|
6,276 |
|
|
|
39 |
% |
|
Marine
|
|
|
18,110 |
|
|
|
35 |
% |
|
|
17,083 |
|
|
|
41 |
% |
|
|
1,027 |
|
|
|
6 |
% |
|
Automotive/Mobile
|
|
|
181,999 |
|
|
|
69 |
% |
|
|
126,149 |
|
|
|
57 |
% |
|
|
55,850 |
|
|
|
44 |
% |
|
Aviation
|
|
|
21,679 |
|
|
|
31 |
% |
|
|
19,751 |
|
|
|
30 |
% |
|
|
1,928 |
|
|
|
10 |
% |
|
Total
|
|
$ |
269,460 |
|
|
|
53 |
% |
|
$ |
200,158 |
|
|
|
46 |
% |
|
$ |
69,302 |
|
|
|
35 |
% |
Cost of goods sold increased 35% for the 13-week period ended March 26, 2011 when compared to the year ago quarter. The increase was driven primarily by increased volumes and a non-recurring warranty benefit that contributed to reduced costs in 2010. In the first quarter of 2010, cost of goods sold as a percentage of revenues was positively impacted by 510 basis points due to a $21.8 million warranty adjustment related to a change in estimate in warranty reserves. Cost per unit, excluding the warranty adjustment, increased by 3% year-over-year.
Gross Profit
| |
|
13-weeks ended March 26, 2011
|
|
|
13-weeks ended March 27, 2010
|
|
|
Quarter over Quarter
|
|
| |
|
Gross Profit
|
|
|
% of Revenues
|
|
|
Gross Profit
|
|
|
% of Revenues
|
|
|
$ Change
|
|
|
% Change
|
|
|
Outdoor
|
|
$ |
41,353 |
|
|
|
62 |
% |
|
$ |
38,510 |
|
|
|
65 |
% |
|
$ |
2,843 |
|
|
|
7 |
% |
|
Fitness
|
|
|
33,792 |
|
|
|
60 |
% |
|
|
27,051 |
|
|
|
62 |
% |
|
|
6,741 |
|
|
|
25 |
% |
|
Marine
|
|
|
33,198 |
|
|
|
65 |
% |
|
|
24,231 |
|
|
|
59 |
% |
|
|
8,967 |
|
|
|
37 |
% |
|
Automotive/Mobile
|
|
|
82,551 |
|
|
|
31 |
% |
|
|
94,775 |
|
|
|
43 |
% |
|
|
(12,224 |
) |
|
|
-13 |
% |
|
Aviation
|
|
|
47,480 |
|
|
|
69 |
% |
|
|
46,342 |
|
|
|
70 |
% |
|
|
1,138 |
|
|
|
2 |
% |
|
Total
|
|
$ |
238,374 |
|
|
|
47 |
% |
|
$ |
230,909 |
|
|
|
54 |
% |
|
$ |
7,465 |
|
|
|
3 |
% |
Gross profit dollars in the first quarter of 2011 increased 3% while gross profit margin decreased 660 basis points compared to the first quarter of 2010 driven primarily by the automotive/mobile segment. Gross profit dollars increased in all segments excluding automotive/mobile which represented 35% of gross profit in first quarter 2011 compared to 41% of gross profit in first quarter 2010.
The automotive/mobile segment gross profit margin percentage decreased 1170 basis points driven by the 2010 warranty benefit discussed above and a 7% increase in per unit costs in 2011. The Company benefited from a 610 basis point increase in gross profit margin percentage for the marine segment due to the product mix shifting toward higher margin units including chartplotters and networked solutions. Outdoor and fitness gross profit margin percentage decreased 260 basis points and 250 basis points, respectively, from the year-ago quarter driven primarily by the 2010 warranty benefit.
Advertising Expense
| |
|
13-weeks ended March 26, 2011
|
|
|
13-weeks ended March 27, 2010
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter over Quarter
|
|
| |
|
Advertising
|
|
|
% of Revenues
|
|
|
Advertising
|
|
|
% of Revenues
|
|
|
$ Change
|
|
|
% Change
|
|
|
Outdoor
|
|
$ |
2,901 |
|
|
|
4 |
% |
|
$ |
2,104 |
|
|
|
4 |
% |
|
$ |
797 |
|
|
|
38 |
% |
|
Fitness
|
|
|
3,480 |
|
|
|
6 |
% |
|
|
1,703 |
|
|
|
4 |
% |
|
|
1,777 |
|
|
|
104 |
% |
|
Marine
|
|
|
2,438 |
|
|
|
5 |
% |
|
|
2,425 |
|
|
|
6 |
% |
|
|
13 |
|
|
|
1 |
% |
|
Automotive/Mobile
|
|
|
10,148 |
|
|
|
4 |
% |
|
|
9,911 |
|
|
|
4 |
% |
|
|
237 |
|
|
|
2 |
% |
|
Aviation
|
|
|
989 |
|
|
|
1 |
% |
|
|
1,257 |
|
|
|
2 |
% |
|
|
(268 |
) |
|
|
-21 |
% |
|
Total
|
|
$ |
19,956 |
|
|
|
4 |
% |
|
$ |
17,400 |
|
|
|
4 |
% |
|
$ |
2,556 |
|
|
|
15 |
% |
Advertising expense increased 15% in absolute dollars while remaining stable as a percentage of revenues when compared with the year-ago period. The increase in absolute dollars occurred in all segments excluding aviation and was driven by fitness sponsorships and cooperative advertising, which increased with volume growth, offset by less print and media advertising in automotive/mobile. As a percentage of revenues, advertising expenses were 4% in the first quarter of both 2011 and 2010. This metric was stable or decreased in all segments excluding fitness.
Selling, General and Administrative Expense
| |
|
13-weeks ended March 26, 2011
|
|
|
13-weeks ended March 27, 2010
|
|
|
|
|
| |
|
Selling, General &
|
|
|
|
|
|
Selling, General &
|
|
|
|
|
|
Quarter over Quarter
|
|
| |
|
Admin. Expenses
|
|
|
% of Revenues
|
|
|
Admin. Expenses
|
|
|
% of Revenues
|
|
|
$ Change
|
|
|
% Change
|
|
|
Outdoor
|
|
$ |
9,607 |
|
|
|
14 |
% |
|
$ |
9,064 |
|
|
|
15 |
% |
|
$ |
543 |
|
|
|
6 |
% |
|
Fitness
|
|
|
9,412 |
|
|
|
17 |
% |
|
|
7,149 |
|
|
|
16 |
% |
|
|
2,263 |
|
|
|
32 |
% |
|
Marine
|
|
|
8,349 |
|
|
|
16 |
% |
|
|
6,989 |
|
|
|
17 |
% |
|
|
1,360 |
|
|
|
19 |
% |
|
Automotive/Mobile
|
|
|
40,930 |
|
|
|
15 |
% |
|
|
39,225 |
|
|
|
18 |
% |
|
|
1,705 |
|
|
|
4 |
% |
|
Aviation
|
|
|
4,889 |
|
|
|
7 |
% |
|
|
5,251 |
|
|
|
8 |
% |
|
|
(362 |
) |
|
|
-7 |
% |
|
Total
|
|
$ |
73,187 |
|
|
|
14 |
% |
|
$ |
67,678 |
|
|
|
16 |
% |
|
$ |
5,509 |
|
|
|
8 |
% |
Selling, general and administrative expense increased 8% in absolute dollars while decreasing 130 basis points as a percentage of revenues compared to the year-ago quarter. As a percent of revenues, selling, general and administrative expenses decreased from 16% of revenues in the first quarter of 2010 to 14% of revenues in the first quarter of 2011. The absolute dollar increase is primarily related to product support and marketing costs. Percentage change for the outdoor, fitness and marine segments is driven largely by the allocation of costs based on revenues.
Research and Development Expense
| |
|
13-weeks ended March 26, 2011
|
|
|
13-weeks ended March 27, 2010
|
|
|
|
|
| |
|
Research &
|
|
|
|
|
|
Research &
|
|
|
|
|
|
Quarter over Quarter
|
|
| |
|
Development
|
|
|
% of Revenues
|
|
|
Development
|
|
|
% of Revenues
|
|
|
$ Change
|
|
|
% Change
|
|
|
Outdoor
|
|
$ |
4,038 |
|
|
|
6 |
% |
|
$ |
2,973 |
|
|
|
5 |
% |
|
$ |
1,065 |
|
|
|
36 |
% |
|
Fitness
|
|
|
5,443 |
|
|
|
10 |
% |
|
|
4,000 |
|
|
|
9 |
% |
|
|
1,443 |
|
|
|
36 |
% |
|
Marine
|
|
|
7,278 |
|
|
|
14 |
% |
|
|
5,888 |
|
|
|
14 |
% |
|
|
1,390 |
|
|
|
24 |
% |
|
Automotive/Mobile
|
|
|
29,878 |
|
|
|
11 |
% |
|
|
28,657 |
|
|
|
13 |
% |
|
|
1,221 |
|
|
|
4 |
% |
|
Aviation
|
|
|
23,841 |
|
|
|
34 |
% |
|
|
20,965 |
|
|
|
32 |
% |
|
|
2,876 |
|
|
|
14 |
% |
|
Total
|
|
$ |
70,478 |
|
|
|
14 |
% |
|
$ |
62,483 |
|
|
|
14 |
% |
|
$ |
7,995 |
|
|
|
13 |
% |
Research and development expense increased 13% due to ongoing development activities for new products and the addition of almost 250 new engineering personnel to our staff since the year-ago quarter. Research and development costs increased $8.0 million when compared with the year-ago quarter representing a 60 basis point decrease as a percent of revenue due to revenue growth outpacing research and development growth.
Operating Income
| |
|
13-weeks ended March 26, 2011
|
|
|
13-weeks ended March 27, 2010
|
|
|
Quarter over Quarter
|
|
| |
|
Operating Income
|
|
|
% of Revenues
|
|
|
Operating Income
|
|
|
% of Revenues
|
|
|
$ Change
|
|
|
% Change
|
|
|
Outdoor
|
|
$ |
24,807 |
|
|
|
37 |
% |
|
$ |
24,369 |
|
|
|
41 |
% |
|
$ |
438 |
|
|
|
2 |
% |
|
Fitness
|
|
|
15,457 |
|
|
|
27 |
% |
|
|
14,199 |
|
|
|
33 |
% |
|
|
1,258 |
|
|
|
9 |
% |
|
Marine
|
|
|
15,133 |
|
|
|
29 |
% |
|
|
8,929 |
|
|
|
22 |
% |
|
|
6,204 |
|
|
|
69 |
% |
|
Automotive/Mobile
|
|
|
1,595 |
|
|
|
1 |
% |
|
|
16,982 |
|
|
|
8 |
% |
|
|
(15,387 |
) |
|
|
-91 |
% |
|
Aviation
|
|
|
17,761 |
|
|
|
26 |
% |
|
|
18,869 |
|
|
|
29 |
% |
|
|
(1,108 |
) |
|
|
-6 |
% |
|
Total
|
|
$ |
74,753 |
|
|
|
15 |
% |
|
$ |
83,348 |
|
|
|
19 |
% |
|
$ |
(8,595 |
) |
|
|
-10 |
% |
Operating income decreased 10% in absolute dollars and declined 460 basis points as a percent of revenue when compared to the first quarter of 2010. Declining gross margin percentage, driven primarily by the warranty benefit in 2010 discussed above, was only partially offset by reduced operating expenses as a percent of revenues.
Other Income (Expense)
| |
|
13-weeks ended
|
|
|
13-weeks ended
|
|
| |
|
March 26, 2011
|
|
|
March 27, 2010
|
|
|
Interest Income
|
|
$ |
7,214 |
|
|
$ |
6,879 |
|
|
Foreign Currency Exchange
|
|
|
12,140 |
|
|
|
(46,537 |
) |
|
Other
|
|
|
2,819 |
|
|
|
1,833 |
|
|
Total
|
|
$ |
22,173 |
|
|
$ |
(37,825 |
) |
The average interest rate return on cash and investments during the first quarter of 2011 was 1.3% compared to 1.4% during the same quarter of 2010. The increase in interest income is attributable to increasing cash balances offset by decreasing interest rates.
Foreign currency gains and losses for the Company are primarily tied to movements by the Taiwan Dollar, the Euro, and the British Pound Sterling. The Taiwan Dollar is the functional currency of Garmin Corporation. The U.S. Dollar remains the functional currency of Garmin (Europe) Ltd. The Euro is the functional currency of all other European subsidiaries excluding Garmin Danmark, Garmin Sweden, Garmin Polska and Garmin Norge. As these entities have grown, Euro currency moves generate material gains and losses. Additionally, Euro-based inter-company transactions in Garmin Ltd. can also generate currency gains and losses. The Canadian Dollar, Danish Krone, Swedish Krona, Australian Dollar, Polish Zloty and Norwegian Kroner are the functional currency of Dynastream Innovations, Inc., Garmin Danmark, Garmin Sweden, Garmin Australasia, Garmin Polska and Garmin Norge respectively; due to these entities’ relative size, currency moves are not expected to have a material impact on the Company’s financial statements.
The majority of the $12.1 million currency gain in the first quarter of 2011 was due to the weakening of the U.S. Dollar compared to the Euro and other global currencies. The weakening of the U.S. Dollar compared to the Taiwan Dollar contributed a partially offsetting loss. The currency movement of the Euro and Taiwan Dollar generate gains and losses due to the revaluation of Euro denominated assets (cash and receivables) in Garmin Ltd. and Garmin Europe, and also the revaluation of the U.S. Dollar denominated assets/liabilities (cash, receivables and payables) in Garmin Corp. (Taiwan). During the first quarter of 2011, the U.S. Dollar weakened 7.8% and 4.2% compared to the Euro and the British Pound Sterling, respectively, resulting in a gain of $33.0 million. In addition, the U.S. Dollar weakened 3.4% against the Taiwan Dollar, resulting in a $22.1 million loss. The remaining net currency gain of $1.2 million related to other currencies and timing of transactions.
The majority of the $46.5 million currency loss in the first quarter of 2010 was due to the strengthening of the U.S. Dollar compared to the Euro and the British Pound Sterling. The weakening of the U.S. Dollar compared to the Taiwan Dollar also contributed to the loss. During the first quarter of 2010, the U.S. Dollar strengthened 7.0% and 6.9%, respectively, compared to the Euro and the British Pound Sterling, resulting in a loss of $39.1 million. In addition, the U.S. Dollar weakened 1.3% against the Taiwan Dollar, resulting in a $9.1 million loss. The remaining net currency gain of $1.7 million related to other currencies and timing of transactions.
Income Tax Provision
Our earnings before taxes increased 113% when compared to the same quarter in 2010, and our income tax expense decreased by $6.8 million, to $1.4 million for the 13-week period ended March 26, 2011, from $8.2 million for the 13-week period ended March 27, 2010. The effective tax rate was 1.5% in the first quarter of 2011 and 18.0% in the first quarter of 2010. The change in the effective tax rate and decrease in income tax expense were primarily driven by the release of reserves related to the expiration of certain statutes for Garmin Europe and lower U.S. reserves provided in 2011 following favorable audits in both 2010 and 2011.
Net Income
As a result of the above, net income increased 156% for the 13-week period ended March 26, 2011 to $95.5 million compared to $37.3 million for the 13-week period ended March 27, 2010.
Liquidity and Capital Resources
Net cash generated by operating activities was $207.6 million for the 13-week period ended March 26, 2011 compared to $200.1 million for the 13-week period ended March 27, 2010. Primary drivers of the cash generation included $95.5 million of net income with non-cash adjustments for depreciation/amortization of $22.4 million, and stock compensation expense of $8.7 million, $327.2 million related to accounts receivable collections on seasonally higher sales in the fourth quarter of 2010 and $21.8 million of sales recorded but deferred as required by our revenue recognition policies. This cash generation was partially offset by uses of cash including a $190.8 million reduction in other current and noncurrent liabilities related primarily to the timing of royalty payments and sales program costs, a $17.6 million reduction in accounts payable following the seasonally strong fourth quarter, and an $11.1 million increase in inventories following a low inventory level exiting 2010.
Cash flow used in investing activities during the 13-week period ending March 26, 2011 was $274.6 million. Cash flow used in investing activities principally related to the net purchase of $264.6 million of fixed income securities associated with the investment of our on-hand cash balances, $7.2 million in capital expenditures primarily related to business operation and maintenance activities, and the purchase of intangible assets for $2.6 million. It is management’s goal to invest the on-hand cash consistent with the Company’s investment policy, which has been approved by the Board of Directors. The investment policy’s primary purpose is to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of maximum safety. The average interest rate return on cash and investments during the 13-weeks ended March 26, 2011 was 1.3%.
Net cash provided by financing activities during the period was $3.8 million resulting from the issuance of common stock related to our Company stock option plan and stock based compensation tax benefits.
We believe that our existing cash balances and cash flow from operations will be sufficient to meet our projected capital expenditures, working capital, payment of dividends, and other cash requirements at least through the end of fiscal 2011.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market Sensitivity
We have market risk primarily in connection with the pricing of our products and services and the purchase of raw materials. Product pricing and raw material costs are both significantly influenced by semiconductor market conditions. Historically, during cyclical economic downturns, we have been able to offset pricing declines for our products through a combination of improved product mix and success in obtaining price reductions in raw material costs.
Inflation
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.
Foreign Currency Exchange Rate Risk
The operation of the Company’s subsidiaries in international markets results in exposure to movements in currency exchange rates. The potential of volatile foreign exchange rate fluctuations in the future could have a significant effect on our results of operations. In accordance with the Accounting Standards Code, the financial statements of all Company entities with functional currencies that are not United States dollars (USD) are translated for consolidation purposes into USD, the reporting currency of Garmin Ltd. Sales, costs, and expenses are translated at rates prevailing during the reporting periods and at end-of-period rates for all assets and liabilities. The effect of this translation is recorded in a separate component of stockholders’ equity and have been included in accumulated other comprehensive income/(loss) in the accompanying condensed consolidated balance sheets.
Foreign currency gains and losses for the Company are primarily tied to movements by the Taiwan Dollar (TD), the Euro, and the British Pound Sterling. The U.S. Dollar (USD) remains the functional currency of Garmin (Europe) Ltd. The Euro is the functional currency of all European subsidiaries excluding Garmin Danmark, Garmin Sweden, Garmin Polska, and Garmin Norge. As these entities have grown, Euro currency moves generated material gains and losses. Additionally, Euro-based inter-company transactions in Garmin Ltd. can also generate currency gains and losses. The Canadian Dollar, Danish Krone, Swedish Krona, Australian Dollar, Polish Zloty and Norwegian Kroner are the functional currency of Dynastream Innovations, Inc., Garmin Danmark, Garmin Sweden, Garmin Australasia, Garmin Polska, and Garmin Norge, respectively; due to these entities’ relative size, currency moves are not expected to have a material impact on the Company’s financial statements.
Interest Rate Risk
As of March 26, 2011, we are exposed to interest rate risk in connection with our investments in marketable securities. As interest rates change, the unrealized gains and losses associated with those securities will fluctuate accordingly. As we have no outstanding long term debt, we have no meaningful debt-related interest rate risk.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. As of March 26, 2011, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of March 26, 2011 that our disclosure controls and procedures were effective such that the information relating to the Company, required to be disclosed in our Securities and Exchange Commission ("SEC") reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company's management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in internal control over financial reporting. There has been no change in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended March 26, 2011 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Part II - Other Information
Item 1. Legal Proceedings
Ambato Media, LLC v. Clarion Co., Ltd., Clarion Corporation of America, Delphi Corporation, Fujitsu Limited, Fujitsu Ten Corporation of America, Garmin Ltd., Garmin International, Inc., Victor Company of Japan Ltd., JVC Americas Corporation, JVC Kenwood Holdings, Inc., J&K Car Electronics Corporation, LG Electronics, Inc., LG Electronics USA, Inc., MiTAC International Corporation, MiTAC Digital Corporation, Mio Technology USA Ltd., Navigon, Inc. Nextar Inc., Panasonic Corporation, Panasonic Corporation of North America, Pioneer Corporation, Pioneer Electronics (USA) Inc., Sanyo Electric Co., Ltd., Sanyo North America Corporation, Sanyo Electronic Device (U.S.A.) Corporation, TomTom N.V., TomTom International B.V., and TomTom, Inc.
On August 14, 2009, Ambato Media, LLC filed suit in the United States District Court for the Eastern District of Texas against Garmin Ltd. and Garmin International, Inc. along with several codefendants alleging infringement of U.S. Patent No. 5,432,542 (“the ’542 patent”). On September 28, 2009, Garmin filed its Answer and Counterclaims asserting the ’542 patent is invalid and not infringed. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes that the claims are without merit and intends to vigorously defend this action.
Pioneer Corporation v. Garmin Deutschland GmbH, Garmin Ltd., Garmin International, Inc., Garmin (Europe Ltd. and Garmin Corporation
On October 9, 2009, Pioneer Corporation filed suit in the District Court in Düsseldorf, Germany against Garmin Deutschland GmbH, Garmin Ltd., Garmin International, Inc., Garmin Corporation and Garmin (Europe) Ltd. alleging infringement of European Patent No. 775 892 (“the ‘892 Patent”) and European Patent No. 508 681 (“the‘681 Patent”). Garmin has filed separate lawsuits in the German Federal Patent Court in Munich seeking declaratory judgments of invalidity of the ‘892 Patent and the ‘681 Patent. On January 11, 2011, the District Court in Düsseldorf issued decisions finding infringement of the ’892 and ’681 Patents. On April 11, 2011, Garmin filed briefs with the appellate court appealing these decisions. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes that the claims are without merit and intends to vigorously defend this action.
In the Matter of Certain Multimedia Display and Navigation Devices and Systems, Components Thereof, and Products Containing the Same.
On November 13, 2009, Pioneer Corporation and Pioneer Electronics (USA) Inc. (collectively, “Pioneer”) filed a complaint with the United States International Trade Commission (the “Commission”) against Garmin International, Inc., Garmin Corporation, and Honeywell International Inc. alleging violation of Section 337 of the Tariff Act of 1930 and infringement of U.S. Patent No. 5,365,448 (“the ’448 patent”), U.S. Patent No. 6,122,592 (“the ’592 patent”), and U.S. Patent No. 5,424,951 (“the ’951 patent”). On January 12, 2010, Garmin filed its Answer asserting the ’448 patent, the ’592 patent, and the ’951 patent are invalid and not infringed. A hearing was held from September 13-21, 2010. The parties completed their post-hearing briefing on October 14, 2010. On December 16, 2010, the Administrative Law Judge issued an Initial Determination concluding there is no violation of Section 337 and finding that the ’448, ’592, and ’951 patents are not infringed. On January 5, 2011 Pioneer filed a petition for review of the claim construction and non-infringement holdings of the Initial Determination. On April 18, 2011, the Commission issued a notice asking for public comments on whether portfolio licensing activities generally can satisfy the statutory mandate of a domestic industry for any particular asserted patent within the portfolio. Garmin is preparing to file its brief answering the Commission’s specific questions on or before May 3, 2011 and will thereafter await final confirmation of the Initial Determination by the Commission. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes these claims are without merit and intends to vigorously defend this action.
Vehicle IP, LLC v. AT&T Mobility LLC, Cellco Partnership, Garmin International, Inc., Garmin USA, Inc., Networks in Motion, Inc., Telecommunication Systems, Inc., Telenav Inc., United Parcel Service, Inc., and UPS Logistics Technologies, Inc.
On December 31, 2009, Vehicle IP, LLC filed suit in the United States District Court for the District of Delaware against Garmin International, Inc. and Garmin USA, Inc. along with several codefendants alleging infringement of U.S. Patent No. 5,987,377 (“the ’377 patent”). On March 11, 2010, Garmin filed its Answer and Counterclaims asserting the ’377 patent is invalid and not infringed. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes these claims are without merit and intends to vigorously defend this action.
Nazomi Communications, Inc. v. Nokia Corporation, Nokia Inc., Microsoft Corporation, Amazon.com, Inc., Western Digital Corporation, Western Digital Technologies, Inc., Garmin Ltd., Garmin Corporation, Garmin International, Inc., Garmin USA, Inc., Sling Media, Inc., VIZIO, Inc., and Iomega Corporation.
On February 8, 2010, Nazomi Communications, Inc. filed suit in the United States District Court for the Central District of California against Garmin Ltd., Garmin Corporation, Garmin International, Inc., and Garmin USA, Inc. along with several codefendants alleging infringement of U.S. Patent No. 7,080,362 (“the ’362 patent”) and U.S. Patent No. 7,225,436 (“the ’436 patent”). Garmin believes the ’362 patent and the ’436 patent are not infringed. On April 27, 2010, ARM Ltd., the designer of the accused hardware, filed a Motion to Intervene and a Motion to Transfer the case to the Northern District of California. On June 21, 2010, the court granted ARM Ltd.’s motion to intervene. On October 14, 2010, the court granted ARM Ltd.’s renewed motion to transfer. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes these claims are without merit and intends to vigorously defend this action.
Visteon Global Technologies, Inc. and Visteon Technologies LLC v. Garmin International, Inc.
On February 10, 2010, Visteon Global Technologies, Inc. and Visteon Technologies LLC filed suit in the United States District Court for the Eastern District of Michigan, Southern Division, against Garmin International, Inc. alleging infringement of U.S. Patent No. 5,544,060 (“the ‘060 patent”), U.S. Patent No. 5,654,892 (“the ‘892 patent”), U.S. Patent No. 5,832, 408 (“the ‘408 patent”), U.S. Patent No 5,987,375 (“the ‘375 patent”) and U.S. Patent No 6,097,316 (“the ‘316 patent”). On May 17, 2010, Garmin filed its Answer asserting that each claim of the ‘060 patent, the ‘892 patent, the ‘408 patent and the ‘375 patent is not infringed and/or invalid. On April 12, 2011, the special master appointed by the court held a claim construction hearing. The parties await the special master’s report construing the claims of the patents-in-suit. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes that the claims in this lawsuit are without merit and intends to vigorously defend this action.
Bandspeed, Inc. v. Acer, Inc., Acer American Corporation, Belkin International, Inc., Belkin,Inc., Casio Computer Co., Ltd., Xasio Hitachi Mobile CommunicationsCo. Ltd., Xasio America, Inc., Dell Inc., Garmin International, Inc., Garmin USA, Inc., GN Netcom A/S, GN U.S. Inc. a/k/a GN Netcom Inc., Hewlett-Packard Company, Hewlett-Packard Development Company, L.P., HTC Corporation, HTC America, Inc., Huawei Technologies Co. Ltd., Kyocera Corporation, Kyocera International, Inc., Kyocera Communications, Inc., Kyocera Wireless Corporation, Lenovo (United States), Inc., LG Electronics, Inc., LG Electronics U.S.A. Inc., LG Electronics Mobilecomm U.S.A. Inc., Motorola, Inc., Nokia Corporation, Nokia Inc., Pantech Wireless, Inc. Plantronics, inc., Research in Motion Ltd., Research in Motion Corporation, Samsung Telecommunications America, LLC, TomTom International B.V., TomTom, Inc., Toshiba Corporation, Toshiba America information Systems, Inc., and Toshiba America, Inc.
On June 30, 2010, Bandspeed, Inc. filed suit in the United States District Court for the Eastern District of Texas against 38 companies, including Garmin International, Inc. and Garmin USA, Inc. alleging infringement of U.S. Patent No 7,027,418 (“the ‘418 patent”) and U.S. Patent No 7,670,614 (“the ‘614 patent”). On October 6, 2010, the defendants filed a Motion to Transfer Venue to the Western District of Texas and the parties await the court’s ruling on this motion. On January 21, 2011, Bandspeed, Inc. filed an Amended Complaint adding additional claims against several of the codefendants, but not against Garmin. On February 22, 2011, Garmin filed its Answer to the Amended Complaint with counterclaims asserting that the asserted claims of the ’418 and ’614 patents are invalid and not infringed. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes the claims in this lawsuit are without merit and intends to vigorously defend this action.
Tqranis IP LLC v. Garmin International, Inc., Universal Avionics Systems Corporation, Johnson Outdoors Marine Electronics, Inc., Johnson Outdoors Inc., Raymarine Inc., Raymarine UK Ltd., Navico, Inc., and Navico Holdings A.S.
On November 22, 2010, Taranis IP LLC filed suit in the United States District Court for the Northern District of Illinois against eight companies, including Garmin International, Inc., alleging infringement of U.S. Patent No. 5,995,903 (“the ’903 patent”). On February 1, 2011, Garmin filed its Answer and counterclaims asserting that each claim of the ’903 patent is not infringed and/or invalid. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity, or financial position, Garmin believes the claims in this lawsuit are without merit and intends to vigorously defend this action.
Triangle Software, LLC v. Garmin International, Inc., TomTom Inc., Volkswagen Group of America, Inc. and Westwood One, Inc.
On December 28, 2010, Triangle Software, LLC filed suit in the United States District Court for the Eastern District of Virginia against four companies, including Garmin International, Inc., alleging infringement of U.S. Patent No. 7,557,730 (“the ’730 patent”), U.S. Patent No. 7,221,287 (“the ’287 patent”), U.S. Patent No. 7,375,649 (“the ’649 patent”), U.S. Patent No. 7,508,321 (“the ’321 patent”), and U.S. Patent No. 7,702,452 (“the ’452 patent”). On March 16, 2011, Garmin filed its Amended Answer asserting that the patents-in-suit are unenforceable because of the inequitable conduct committed by the inventors before the Patent Office and filed counterclaims asserting that each asserted claim of the ’730, ’287, ’649, ’321, and ’452 patents is not infringed and/or invalid. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity, or financial position, Garmin believes the claims in this lawsuit are without merit and intends to vigorously defend this action.
In the Matter of Certain Semiconductor Chips and Products Containing Same
On December 1, 2010, Rambus Inc. filed a complaint with the United States International Trade Commission against 33 companies, including Garmin International, Inc., alleging infringement of U.S. Patent No. 6,470,405 (“the ’405 patent”), U.S. Patent No. 6,591,353 (“the ’353 patent”), U.S. Patent No. 7,287,109 (“the ’109 patent”), U.S. Patent No. 7,602,857 (“the ’857 patent”), U.S. Patent No. 7,602,858 (“the ’858 patent”), and U.S. Patent No. 7,715,494 (“the ’494 patent”). Garmin’s semiconductor chip suppliers are also named in the complaint and Garmin believes these suppliers have indemnification obligations to defend Garmin in this matter. On February 1, 2011, Garmin filed its Answer asserting that the asserted claims of the ’405, ’353, ’109, ’857, ’858, and the ’494 patents are invalid and/or not infringed. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes these claims are without merit and intends to vigorously defend this action.
From time to time Garmin is involved in other legal actions arising in the ordinary course of our business. We believe that the ultimate outcome of these actions will not have a material adverse effect on our business, financial condition and results of operations.
Item 1A. Risk Factors
There are many risks and uncertainties that can affect our future business, financial performance or share price. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 25, 2010. There have been no material changes during the 13-week period ended March 26, 2011 in the risks described in our Annual Report on Form 10-K. These risks, however, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Items (a) and (b) are not applicable.
(c) Issuer Purchases of Equity Securities
The Board of Directors approved a share repurchase program on February 12, 2010, authorizing the Company to purchase up to $300,000 of its common shares as market and business conditions warrant. The share repurchase authorization expires on December 31, 2011. The Company did not purchase any shares under this authorization in the first quarter of fiscal 2011.
Item 3. Defaults Upon Senior Securities
None
Item 5. Other Information
Not applicable
Item 6. Exhibits
Exhibit 31.1 Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
Exhibit 31.2 Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
Exhibit 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Exhibit 101.INS
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XBRL Instance Document
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Exhibit 101.SCH
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XBRL Taxonomy Extension Schema
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Exhibit 101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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Exhibit 101.LAB
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XBRL Taxonomy Extension Label Linkbase
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Exhibit 101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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GARMIN LTD.
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By
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/s/ Kevin Rauckman
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Kevin Rauckman
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Chief Financial Officer
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(Principal Financial Officer and
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Principal Accounting Officer)
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Dated: May 4, 2011
INDEX TO EXHIBITS
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Exhibit No.
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Description
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Exhibit 31.1
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Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
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Exhibit 31.2
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Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
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Exhibit 32.1
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Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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Exhibit 32.2
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Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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Exhibit 101.INS
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XBRL Instance Document
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Exhibit 101.SCH
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XBRL Taxonomy Extension Schema
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Exhibit 101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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Exhibit 101.LAB
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XBRL Taxonomy Extension Label Linkbase
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Exhibit 101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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