Dividend Recommendation and Share Repurchase Program:
The board of directors intends to recommend to the shareholders for approval at the annual meeting to be held on June 5, 2015, a cash dividend in the amount of $2.04 per share (subject to possible adjustment based on the total amount of the dividend in Swiss Francs as approved at the annual meeting), payable in four equal installments on dates to be determined by the Board. The Board currently anticipates the scheduling of the dividend in four installments as follows:
Dividend Date | Record Date | $s per share | ||||||||||||
June 30, 2015 | June 16, 2015 | $0.51 | ||||||||||||
September 30, 2015 | September 15, 2015 | $0.51 | ||||||||||||
December 31, 2015 | December 15, 2015 | $0.51 | ||||||||||||
March 31, 2016 | March 15, 2016 | $0.51 | ||||||||||||
In addition, the board of directors has established March 31, 2015 as the payment date for the final dividend installment of $0.48 per share, with a record date of March 16, 2015, per the prior approval at the 2014 annual shareholders’ meeting. The first, second and third payments of $0.48 per share were made on June 30, 2014, September 30, 2014, and December 31, 2014, respectively.
On February 13, 2015, our board of directors authorized the Company to repurchase up to $300 million of the Company’s shares as market and business conditions warrant through December 31, 2016. The repurchases may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. The Company views the stock repurchase as an appropriate use of cash given the long-term growth prospects of the Company and ongoing free cash flow generation.
Webcast Information/Forward-Looking Statements:
The information for Garmin Ltd.’s earnings call is as follows:
When: | Wednesday, February 18, 2015 at 10:30 a.m. Eastern | ||||||
Where: |
http://www.garmin.com/aboutGarmin/invRelations/irCalendar.html |
||||||
How: | Simply log on to the web at the address above or call to listen in at 888-461-2011 | ||||||
An archive of the live webcast will be available until March 27, 2015 on the Garmin website at www.garmin.com. To access the replay, click on the Investor Relations link and click over to the Events Calendar page.
This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding the Company’s estimated earnings and revenue for fiscal 2015, the Company’s expected segment revenue growth rate, margins, new products to be introduced in 2015 and the Company’s plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors affecting Garmin, including, but not limited to, the risk factors that are described in the Annual Report on Form 10-K for the year ended December 28, 2013 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2013 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.
Garmin, fēnix and vívofit are registered trademarks and epix and vívoactive are trademarks of Garmin Ltd. or its subsidiaries.All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved.
Garmin Ltd. And Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Income (Unaudited) | |||||||||||||||
(In thousands, except per share information) | |||||||||||||||
13-Weeks Ended | 52-Weeks Ended | ||||||||||||||
Dec 27, | Dec 28, | Dec 27, | Dec 28, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net sales | $ | 803,306 | $ | 759,694 | $ | 2,870,658 | $ | 2,631,851 | |||||||
Cost of goods sold | 372,458 | 365,057 | 1,266,246 | 1,224,551 | |||||||||||
Gross profit | 430,848 | 394,637 | 1,604,412 | 1,407,300 | |||||||||||
Advertising expense | 54,175 | 34,922 | 146,633 | 112,905 | |||||||||||
Selling, general and administrative expense | 99,119 | 94,671 | 372,032 | 355,440 | |||||||||||
Research and development expense | 101,554 | 92,573 | 395,121 | 364,923 | |||||||||||
Total operating expense | 254,848 | 222,166 | 913,786 | 833,268 | |||||||||||
Operating income | 176,000 | 172,471 | 690,626 | 574,032 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 6,803 | 9,759 | 35,584 | 35,271 | |||||||||||
Foreign currency gains (losses) | 15,967 | 17,258 | (4,299 | ) | 35,538 | ||||||||||
Other | 1,126 | 5,051 | 1,834 | 8,717 | |||||||||||
Total other income (expense) | 23,896 | 32,068 | 33,119 | 79,526 | |||||||||||
Income before income taxes | 199,896 | 204,539 | 723,745 | 653,558 | |||||||||||
Income tax provision (benefit) | (10,349 | ) | 40,954 | 359,534 | 41,146 | ||||||||||
Net income | $ | 210,245 | $ | 163,585 | $ | 364,211 | $ | 612,412 | |||||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 1.10 | $ | 0.84 | $ | 1.89 | $ | 3.13 | |||||||
Diluted | $ | 1.09 | $ | 0.83 | $ | 1.88 | $ | 3.12 | |||||||
Weighted average common | |||||||||||||||
shares outstanding: | |||||||||||||||
Basic | 191,322 | 195,181 | 193,106 | 195,411 | |||||||||||
Diluted | 192,356 | 196,338 | 194,165 | 196,339 | |||||||||||
Garmin Ltd. And Subsidiaries | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
Dec 27, | December 28, | |||||||
2014 | 2013 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,196,268 | $ | 1,179,149 | ||||
Marketable securities | $ | 167,989 | 149,862 | |||||
Accounts receivable, net | $ | 570,191 | 564,586 | |||||
Inventories, net | $ | 420,475 | 382,226 | |||||
Deferred income taxes | $ | 56,102 | 69,823 | |||||
Deferred costs | $ | 51,336 | 57,368 | |||||
Loan receivable | - | 137,379 | ||||||
Prepaid expenses and other current assets | $ | 48,615 | 55,243 | |||||
Total current assets | 2,510,976 | 2,595,636 | ||||||
Property and equipment, net | 430,887 | 414,848 | ||||||
Marketable securities | 1,407,344 | 1,502,106 | ||||||
Restricted cash | 308 | 249 | ||||||
Noncurrent deferred income tax | 67,712 | 88,324 | ||||||
Noncurrent deferred costs | 36,140 | 41,157 | ||||||
Intangible assets, net | 218,083 | 219,494 | ||||||
Other assets | 21,853 | 17,789 | ||||||
Total assets | $ | 4,693,303 | $ | 4,879,603 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 149,094 | $ | 146,582 | ||||
Salaries and benefits payable | 62,764 | 59,794 | ||||||
Accrued warranty costs | 27,609 | 26,767 | ||||||
Accrued sales program costs | 58,934 | 50,903 | ||||||
Deferred revenue | 203,598 | 256,908 | ||||||
Accrued royalty costs | 51,889 | 64,538 | ||||||
Accrued advertising expense | 26,334 | 19,448 | ||||||
Other accrued expenses | 67,780 | 65,657 | ||||||
Deferred income taxes | 17,673 | 989 | ||||||
Income taxes payable | 182,260 | 38,043 | ||||||
Dividend payable | 185,326 | 175,675 | ||||||
Total current liabilities | 1,033,261 | 905,304 | ||||||
Deferred income taxes | 39,497 | 1,758 | ||||||
Non-current income taxes | 80,611 | 140,933 | ||||||
Non-current deferred revenue | 135,130 | 171,012 | ||||||
Other liabilities | 1,437 | 890 | ||||||
Stockholders' equity: | ||||||||
Shares, CHF 10 par value, 208,077 shares authorized and issued; | ||||||||
191,815 shares outstanding at December 27, 2014 | ||||||||
and 195,150 shares outstanding at December 28, 2013 | 1,797,435 | 1,797,435 | ||||||
Additional paid-in capital | 73,521 | 79,263 | ||||||
Treasury stock | (330,132 | ) | (120,620 | ) | ||||
Retained earnings | 1,859,972 | 1,865,587 | ||||||
Accumulated other comprehensive income | 2,571 | 38,041 | ||||||
Total stockholders' equity | 3,403,367 | 3,659,706 | ||||||
Total liabilities and stockholders' equity | $ | 4,693,303 | $ | 4,879,603 | ||||
Garmin Ltd. And Subsidiaries | ||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||
(In thousands) | ||||||||||
52-Weeks Ended | ||||||||||
Dec 27, | Dec 28, | |||||||||
2014 | 2013 | |||||||||
Operating Activities: | ||||||||||
Net income | $ | 364,211 | $ | 612,412 | ||||||
Adjustments to reconcile net income to net cash | ||||||||||
provided by operating activities: | ||||||||||
Depreciation | 48,433 | 48,476 | ||||||||
Amortization | 28,582 | 30,328 | ||||||||
Gain on sale of property and equipment | (306 | ) | (724 | ) | ||||||
Provision for doubtful accounts | 66 | 1,553 | ||||||||
Deferred income taxes | 89,828 | 7,931 | ||||||||
Unrealized foreign currency gain | 573 | (40,120 | ) | |||||||
Provision for obsolete and slow moving inventories | 25,903 | 20,891 | ||||||||
Stock compensation expense | 24,293 | 22,592 | ||||||||
Realized gain on marketable securities | (505 | ) | (5,877 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (27,398 | ) | 38,589 | |||||||
Inventories | (76,491 | ) | (17,593 | ) | ||||||
Other current and non-current assets | 627 | (22,013 | ) | |||||||
Accounts payable | 8,981 | 18,043 | ||||||||
Other current and non-current liabilities | 16,467 | (31,775 | ) | |||||||
Deferred revenue | (87,543 | ) | (16,150 | ) | ||||||
Deferred cost | 11,029 | (2,204 | ) | |||||||
Income taxes payable | 95,961 | (34,275 | ) | |||||||
Net cash provided by operating activities | 522,711 | 630,084 | ||||||||
Investing activities: | ||||||||||
Purchases of property and equipment | (73,339 | ) | (56,083 | ) | ||||||
Proceeds from sale of property and equipment | 748 | 885 | ||||||||
Purchase of intangible assets | (4,720 | ) | (1,122 | ) | ||||||
Purchase of marketable securities | (1,006,482 | ) | (909,151 | ) | ||||||
Redemption of marketable securities | 1,096,676 | 833,491 | ||||||||
Proceeds from repayment (advances) on loan receivable | 137,379 | (137,369 | ) | |||||||
Change in restricted cash | (59 | ) | 587 | |||||||
Acquisitions, net of cash acquired | (18,871 | ) | (5,680 | ) | ||||||
Net cash provided by (used in) investing activities | 131,332 | (274,442 | ) | |||||||
Financing activities: | ||||||||||
Dividends paid | (360,075 | ) | (351,707 | ) | ||||||
Purchase of treasury stock under share repurchase plan | (241,578 | ) | (58,422 | ) | ||||||
Purchase of treasury stock related to equity awards | (18,638 | ) | (24,063 | ) | ||||||
Proceeds from issuance of treasury stock related to equity awards | 20,753 | 22,770 | ||||||||
Tax benefit from issuance of equity awards | (84 | ) | 4,584 | |||||||
Net cash used in financing activities | (599,622 | ) | (406,838 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (37,302 | ) | (835 | ) | ||||||
Net decrease in cash and cash equivalents | 17,119 | (52,031 | ) | |||||||
Cash and cash equivalents at beginning of period | 1,179,149 | 1,231,180 | ||||||||
Cash and cash equivalents at end of period | $ | 1,196,268 | $ | 1,179,149 | ||||||
Garmin Ltd. And Subsidiaries | ||||||||||||
Revenue, Gross Profit, and Operating Income by Segment (Unaudited) | ||||||||||||
Reporting Segments | ||||||||||||
Auto/ | ||||||||||||
Outdoor | Fitness | Marine | Mobile | Aviation | Total | |||||||
13-Weeks Ended Dec 27, 2014 | ||||||||||||
Net sales | $116,432 | $201,303 | $52,460 | $339,832 | $93,279 | $803,306 | ||||||
Gross profit | $71,745 | $122,083 | $24,612 | $147,073 | $65,335 | $430,848 | ||||||
Operating income/(loss) | $40,709 | $57,629 | ($687) | $57,431 | $20,918 | $176,000 | ||||||
13-Weeks Ended Dec 28, 2013 | ||||||||||||
Net sales | $126,617 | $118,623 | $44,583 | $382,504 | $87,367 | $759,694 | ||||||
Gross profit | $78,196 | $73,557 | $23,542 | $154,734 | $64,608 | $394,637 | ||||||
Operating income | $48,659 | $44,224 | $2,404 | $54,193 | $22,991 | $172,471 | ||||||
52-Weeks Ended Dec 27, 2014 | ||||||||||||
Net sales | $427,555 | $568,440 | $248,371 | $1,240,377 | $385,915 | $2,870,658 | ||||||
Gross profit | $266,550 | $358,287 | $129,710 | $569,452 | 280,413 | $1,604,412 | ||||||
Operating income | $151,055 | $190,682 | $26,232 | $215,679 | $106,978 | $690,626 | ||||||
52-Weeks Ended Dec 28, 2013 | ||||||||||||
Net sales | $410,989 | $356,283 | $222,928 | $1,302,314 | $339,337 | $2,631,851 | ||||||
Gross profit | $262,529 | $222,925 | $115,091 | $565,083 | $241,672 | $1,407,300 | ||||||
Operating income | $159,197 | $120,250 | $18,493 | $188,517 | $87,575 | $574,032 | ||||||
Garmin Ltd. And Subsidiaries | |||||||||||||||||||
Revenue by Geography (Unaudited) | |||||||||||||||||||
13-Weeks Ended | 52-Weeks Ended | ||||||||||||||||||
Dec 27, | Dec 28, | Yr over Yr | Dec 27, | Dec 28, | Yr over Yr | ||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||
Net sales | $ | 803,306 | $ | 759,694 | 6 | % | $ | 2,870,658 | $ | 2,631,851 | 9 | % | |||||||
Americas | 448,055 | 430,099 | 4 | % | 1,538,322 | 1,432,895 | 7 | % | |||||||||||
EMEA | 272,384 | 263,063 | 4 | % | 1,054,244 | 955,900 | 10 | % | |||||||||||
APAC | 82,867 | 66,532 | 25 | % | 278,092 | 243,056 | 14 | % | |||||||||||
EMEA - Europe, Middle East and Africa; APAC - Asia Pacific | |||||||||||||||||||