The information for Garmin Ltd.’s earnings call is as follows:
When: | Wednesday, August 2, 2017 at 10:30 a.m. Eastern | |||
Where: | ||||
How: | Simply log on to the web at the address above or call to listen in at 855-757-3897 | |||
An archive of the live webcast will be available until August 3, 2018 on the Garmin website at www.garmin.com. To access the replay, click on the Investor Relations link and select the Quarterly and Annual Earnings page.
This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with similar meanings. Any statements regarding the Company’s GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the Company’s expected segment revenue growth rates, consolidated revenue, gross margins, operating margins, currency movements, expenses, pricing, new products to be introduced in 2017, statements relating to possible future dividends 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 and uncertainties 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 31, 2016 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2016 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.
Garmin, the Garmin logo, the Garmin delta, fēnix, Approach, Rino, Foretrex, G1000, G5000, quatix, and VIRB are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S.; Garmin Elevate and QuickFit 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 | 26-Weeks Ended | |||||||||||||||
July 1, | June 25, | July 1, | June 25, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net sales | $816,885 | $811,609 | $1,455,431 | $1,435,648 | ||||||||||||
Cost of goods sold | 339,027 | 348,651 | 605,450 | 632,840 | ||||||||||||
Gross profit | 477,858 | 462,958 | 849,981 | 802,808 | ||||||||||||
Advertising expense | 42,009 | 44,252 | 73,533 | 76,485 | ||||||||||||
Selling, general and administrative expense | 105,251 | 103,677 | 207,303 | 199,287 | ||||||||||||
Research and development expense | 127,248 | 114,355 | 249,450 | 222,559 | ||||||||||||
Total operating expense | 274,508 | 262,284 | 530,286 | 498,331 | ||||||||||||
Operating income | 203,350 | 200,674 | 319,695 | 304,477 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income | 9,281 | 8,455 | 17,724 | 15,883 | ||||||||||||
Foreign currency gains (losses) | 15,110 | (5,743 | ) | (22,387 | ) | (10,582 | ) | |||||||||
Other income | 314 | 415 | 715 | 1,570 | ||||||||||||
Total other income (expense) | 24,705 | 3,127 | (3,948 | ) | 6,871 | |||||||||||
Income before income taxes | 228,055 | 203,801 | 315,747 | 311,348 | ||||||||||||
Income tax provision (benefit) | 57,105 | 42,737 | (93,015 | ) | 62,193 | |||||||||||
Net income | $170,950 | $161,064 | $408,762 | $249,155 | ||||||||||||
Net income per share: | ||||||||||||||||
Basic | $0.91 | $0.85 | $2.17 | $1.32 | ||||||||||||
Diluted | $0.91 | $0.85 | $2.17 | $1.31 | ||||||||||||
Weighted average common shares outstanding: |
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Basic | 187,757 | 188,892 | 187,974 | 189,195 | ||||||||||||
Diluted | 188,492 | 189,356 | 188,691 | 189,491 | ||||||||||||
Garmin Ltd. And Subsidiaries | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(In thousands, except per share information) | |||||||||
(Unaudited) | |||||||||
July 1, | December 31, | ||||||||
2017 | 2016 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $859,560 | $846,883 | |||||||
Marketable securities | 248,904 | 266,952 | |||||||
Accounts receivable, net | 514,942 | 527,062 | |||||||
Inventories, net | 525,167 | 484,821 | |||||||
Deferred costs | 49,603 | 47,395 | |||||||
Prepaid expenses and other current assets | 106,758 | 89,903 | |||||||
Total current assets | 2,304,934 | 2,263,016 | |||||||
Property and equipment, net | 517,290 | 482,878 | |||||||
Marketable securities | 1,200,432 | 1,213,285 | |||||||
Restricted cash | 117 | 113 | |||||||
Deferred income taxes | 265,719 | 110,293 | |||||||
Noncurrent deferred costs | 62,741 | 56,151 | |||||||
Intangible assets, net | 309,318 | 305,002 | |||||||
Other assets | 88,221 | 94,395 | |||||||
Total assets | $4,748,772 | $4,525,133 | |||||||
Liabilities and Stockholders' Equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | $161,398 | $172,404 | |||||||
Salaries and benefits payable | 86,955 | 88,818 | |||||||
Accrued warranty costs | 37,012 | 37,233 | |||||||
Accrued sales program costs | 51,531 | 80,953 | |||||||
Deferred revenue | 145,603 | 146,564 | |||||||
Accrued royalty costs | 29,378 | 36,523 | |||||||
Accrued advertising expense | 23,180 | 37,440 | |||||||
Other accrued expenses | 95,626 | 70,469 | |||||||
Income taxes payable | 10,961 | 16,163 | |||||||
Dividend payable | 286,865 | 96,168 | |||||||
Total current liabilities | 928,509 | 782,735 | |||||||
Deferred income taxes | 56,691 | 61,220 | |||||||
Noncurrent income taxes | 131,887 | 121,174 | |||||||
Noncurrent deferred revenue | 145,582 | 140,407 | |||||||
Other liabilities | 1,656 | 1,594 | |||||||
Stockholders' equity: | |||||||||
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 187,703 shares outstanding at July 1, 2017 and 188,565 shares outstanding at December 31, 2016 |
17,979 | 17,979 | |||||||
Additional paid-in capital | 1,839,587 | 1,836,047 | |||||||
Treasury stock | (496,342 | ) | (455,964 | ) | |||||
Retained earnings | 2,083,076 | 2,056,702 | |||||||
Accumulated other comprehensive income (loss) | 40,147 | (36,761 | ) | ||||||
Total stockholders' equity | 3,484,447 | 3,418,003 | |||||||
Total liabilities and stockholders' equity | $4,748,772 | $4,525,133 | |||||||
Garmin Ltd. And Subsidiaries | |||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||||
(In thousands) | |||||||||
26-Weeks Ended | |||||||||
July 1, | June 25, | ||||||||
2017 | 2016 | ||||||||
Operating activities: | |||||||||
Net income | $408,762 | $249,155 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation | 29,558 | 26,657 | |||||||
Amortization | 13,273 | 14,852 | |||||||
(Gain) loss on sale or disposal of property and equipment | (56 | ) | 64 | ||||||
Provision for doubtful accounts | 351 | 1,548 | |||||||
Deferred income taxes | (159,719 | ) | (6,074 | ) | |||||
Unrealized foreign currency loss | 25,928 | 3,198 | |||||||
Provision for obsolete and slow moving inventories | 11,072 | 15,892 | |||||||
Stock compensation expense | 20,385 | 19,507 | |||||||
Realized loss (gain) on marketable securities | 584 | (188 | ) | ||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | 23,785 | 24,415 | |||||||
Inventories | (34,621 | ) | (16,672 | ) | |||||
Other current and non-current assets | (6,328 | ) | (865 | ) | |||||
Accounts payable | (20,942 | ) | (32,291 | ) | |||||
Other current and non-current liabilities | (48,162 | ) | (10,806 | ) | |||||
Deferred revenue | 2,988 | (13,066 | ) | ||||||
Deferred costs | (8,383 | ) | (6,089 | ) | |||||
Income taxes payable | 5,352 | 10,135 | |||||||
Net cash provided by operating activities | 263,827 | 279,372 | |||||||
Investing activities: | |||||||||
Purchases of property and equipment | (39,812 | ) | (28,614 | ) | |||||
Proceeds from sale of property and equipment | 121 | - | |||||||
Purchase of intangible assets | (6,336 | ) | (2,831 | ) | |||||
Purchase of marketable securities | (243,880 | ) | (457,433 | ) | |||||
Redemption of marketable securities | 278,719 | 466,526 | |||||||
Change in restricted cash | - | 2 | |||||||
Acquisitions, net of cash acquired | (7,500 | ) | (62,137 | ) | |||||
Net cash used in investing activities | (18,688 | ) | (84,487 | ) | |||||
Financing activities: | |||||||||
Dividends paid | (191,691 | ) | (193,111 | ) | |||||
Purchase of treasury stock under share repurchase plan | (63,957 | ) | (45,097 | ) | |||||
Purchase of treasury stock related to equity awards | (3,582 | ) | (173 | ) | |||||
Proceeds from issuance of treasury stock related to equity awards | 10,316 | 8,970 | |||||||
Tax benefit from issuance of equity awards | - | 2 | |||||||
Net cash used in financing activities | (248,914 | ) | (229,409 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 16,452 | 2,918 | |||||||
Net increase (decrease) in cash and cash equivalents | 12,677 | (31,606 | ) | ||||||
Cash and cash equivalents at beginning of period | 846,883 | 833,070 | |||||||
Cash and cash equivalents at end of period | $859,560 | $801,464 | |||||||
Garmin Ltd. And Subsidiaries | |||||||||||||||||||
Net Sales, Gross Profit, and Operating Income by Segment (Unaudited) |
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(In thousands) |
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Reportable Segments | |||||||||||||||||||
Outdoor |
Fitness |
Marine |
Auto |
Aviation |
Total |
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13-Weeks Ended July 1, 2017 | |||||||||||||||||||
Net sales | $194,776 | $181,022 | $108,545 |
$208,482 |
$124,060 | $816,885 | |||||||||||||
Gross profit | $127,813 | $102,139 | $62,368 | $93,037 | $92,501 | $477,858 | |||||||||||||
Operating income | $74,284 | $37,487 | $24,295 | $27,926 | $39,358 | $203,350 | |||||||||||||
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13-Weeks Ended June 25, 2016 |
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Net sales | $133,096 | $212,855 | $111,599 | $245,728 | $108,331 | $811,609 | |||||||||||||
Gross profit | $85,224 | $119,805 | $64,515 | $112,988 | $80,426 | $462,958 | |||||||||||||
Operating income | $48,565 | $53,074 | $28,548 | $39,623 | $30,864 | $200,674 | |||||||||||||
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26-Weeks Ended July 1, 2017 |
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Net sales | $310,652 | $318,852 | $212,990 | $366,006 | $246,931 | $1,455,431 | |||||||||||||
Gross profit | $201,282 | $179,879 | $122,116 | $162,970 | $183,734 | $849,981 | |||||||||||||
Operating income | $108,735 | $55,959 | $42,440 | $34,595 | $77,966 | $319,695 | |||||||||||||
26-Weeks Ended June 25, 2016 | |||||||||||||||||||
Net sales | $229,923 | $355,273 | $194,479 | $441,326 | $214,647 | $1,435,648 | |||||||||||||
Gross profit | $144,155 | $192,100 | $108,664 | $199,131 | $158,758 | $802,808 | |||||||||||||
Operating income | $76,450 | $69,647 | $38,840 | $58,190 | $61,350 | $304,477 | |||||||||||||
Garmin Ltd. And Subsidiaries | ||||||||||||||||||||
Net Sales by Geography (Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
13-Weeks Ended | 26-Weeks Ended | |||||||||||||||||||
July 1, | June 25, | Yr over Yr | July 1, | June 25, | Yr over Yr | |||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||
Net sales | $816,885 | $811,609 | 1 | % | $1,455,431 | $1,435,648 | 1 | % | ||||||||||||
Americas | 388,092 | 407,017 | -5 | % | 708,281 | 724,974 | -2 | % | ||||||||||||
EMEA | 315,039 | 309,721 | 2 | % | 541,834 | 535,448 | 1 | % | ||||||||||||
APAC | 113,754 | 94,871 | 20 | % | 205,316 | 175,226 | 17 | % |
EMEA - Europe, Middle East and Africa; APAC - Asia Pacific and Australian Continent |