Garmin Reports Second Quarter 2011 Results with Continued Strong

Garmin Reports Second Quarter 2011 Results with Continued Strong Cash Flow Generation

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Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)

	(Unaudited)
	June 25,			December 25,
		2011			2010
Assets
Current assets:
Cash and cash equivalents	$	1,418,871		$	1,260,936
Marketable securities		62,626			24,418
Accounts receivable, net		493,057			747,249
Inventories, net		385,678			387,577
Deferred income taxes		27,691			33,628
Deferred costs		28,343			20,053
Prepaid expenses and other current assets		46,261			24,894
Total current assets		2,462,527			2,498,755

Property and equipment, net		423,697			427,805

Marketable securities		1,016,869			777,401
Restricted cash		1,393			1,277
Licensing agreements, net		8,305			1,800
Noncurrent deferred income tax		73,613			73,613
Noncurrent deferred costs		31,047			24,685
Other intangible assets, net		181,004			183,352
Total assets	$	4,198,455		$	3,988,688

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	125,680		$	132,348
Salaries and benefits payable		37,393			49,288
Accrued warranty costs		41,691			49,885
Accrued sales program costs		48,929			107,261
Deferred revenue		134,341			89,711
Accrued royalty costs		27,509			95,086
Accrued advertising expense		23,544			21,587
Other accrued expenses		70,622			63,043
Deferred income taxes		4,435			4,800
Income taxes payable		13,795			56,028
Dividend payable		388,148			0
Total current liabilities		916,087			669,037

Deferred income taxes		13,180			6,986
Non-current income taxes		157,979			153,621
Non-current deferred revenue		146,973			108,076
Other liabilities		1,542			1,406

Stockholders' equity:
Shares, CHF 10 par value, 208,077,418 shares authorized and issued;
194,087,445 shares outstanding at June 25, 2011;
and 194,358,038 shares outstanding at December 25, 2010;		1,797,435			1,797,435
Additional paid-in capital		53,707			38,268
Treasury stock		(116,099	)		(106,758	)
Retained earnings		1,097,970			1,264,613
Accumulated other comprehensive income		129,681			56,004
Total stockholders' equity		2,962,694			3,049,562
Total liabilities and stockholders' equity	$	4,198,455		$	3,988,688


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

	13-Weeks Ended						26-Weeks Ended
	June 25,			June 26,			June 25,			June 26,
		2011			2010			2011			2010
Net sales	$	674,099		$	728,765		$	1,181,933		$	1,159,833

Cost of goods sold		351,999			337,113			621,459			537,272

Gross profit		322,100			391,652			560,474			622,561

Advertising expense		34,098			42,440			54,054			59,841
Selling, general and administrative expense		85,896			73,832			159,082			141,509
Research and development expense		70,515			73,337			140,994			135,820
Total operating expense		190,509			189,609			354,130			337,170

Operating income		131,591			202,043			206,344			285,391

Other income (expense):
Interest income		7,639			5,791			14,854			12,669
Foreign currency gains (losses)		(14,611	)		(43,605	)		(2,471	)		(90,141	)
Other		2,453			180			5,271			2,013
Total other income (expense)		(4,519	)		(37,634	)		17,654			(75,459	)

Income before income taxes		127,072			164,409			223,998			209,932

Income tax provision		17,595			29,593			19,039			37,788

Net income	$	109,477		$	134,816		$	204,959		$	172,144

Net income per share:
Basic	$	0.56		$	0.68		$	1.06		$	0.86
Diluted	$	0.56		$	0.67		$	1.05		$	0.86

Weighted average common
shares outstanding:
Basic		194,051			198,948			193,986			199,437
Diluted		194,875			200,102			194,801			200,626


Dividends declared per share	$	2.00		$	1.50		$	2.00		$	1.50


Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
		26-Weeks Ended
		June 25,			June 26,
			2011			2010
Operating Activities:
Net income		$	204,959		$	172,144
Adjustments to reconcile net income to net cash
provided by operating activities:
	Depreciation		27,393			26,746
	Amortization		10,861			24,809
	Loss (gain) on sale of property and equipment		308			(6	)
	Provision for doubtful accounts		3,563			(552	)
	Deferred income taxes		7,149			(30	)
	Unrealized foreign currency losses/(gains)		16,363			47,880
	Provision for obsolete and slow moving inventories		(6,998	)		10,309
	Stock compensation expense		17,315			19,099
	Realized losses/(gains) on marketable securities		(4,176	)		(470	)
Changes in operating assets and liabilities, net of acquisitions:
	Accounts receivable		265,448			364,401
	Inventories		20,659			(64,272	)
	Other current assets		(31,490	)		5,142
	Accounts payable		(13,082	)		(52,248	)
	Other current and non-current liabilities		(142,918	)		(193,657	)
	Deferred revenue		83,628			37,425
	Deferred cost		(14,652	)		(6,610	)
	Income taxes payable		(30,033	)		(7,771	)
	License fees		(3,344	)		(472	)
Net cash provided by operating activities			410,953			381,867

Investing activities:
Purchases of property and equipment			(14,315	)		(13,220	)
Purchase of intangible assets			(2,587	)		(8,229	)
Purchase of marketable securities			(520,759	)		(169,062	)
Redemption of marketable securities			263,428			294,350
Change in restricted cash			(116	)		1,111
Net cash (used in)/provided by investing activities			(274,349	)		104,950

Financing activities:
Proceeds from issuance of common stock through
stock purchase plan			4,337			5,452
Taxes paid related to net share settlement of equity awards			(336	)		-
Stock repurchase			-			(84,328	)
Dividends			-			(299,103	)
Tax benefit related to stock option exercise			1,197			1,898
Net cash provided by/(used in) financing activities			5,198			(376,081	)

Effect of exchange rate changes on cash and cash equivalents			16,133			(29,148	)

Net (decrease)/increase in cash and cash equivalents			157,935			81,588
Cash and cash equivalents at beginning of period			1,260,936			1,091,581
Cash and cash equivalents at end of period		$	1,418,871		$	1,173,169


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 June 25, 2011

Net sales	$81,007	$78,014	$79,117	$362,706	$73,255	$674,099
Gross profit	$52,948	$45,502	$44,208	$128,788	$50,654	$322,100
Operating income	$35,667	$25,384	$23,357	$25,277	$21,906	$131,591

13-Weeks Ended June 26, 2010

Net sales	$79,847	$62,469	$74,310	$447,225	$64,914	$728,765
Gross profit	$53,257	$38,506	$49,108	$205,336	$45,445	$391,652
Operating income	$38,035	$24,724	$32,146	$88,548	$18,590	$202,043


26-Weeks Ended June 25, 2011

Net sales	$147,458	$134,382	$130,425	$627,255	$142,413	$1,181,933
Gross profit	$94,301	$79,293	$77,406	$211,340	$98,134	$560,474
Operating income	$60,474	$40,841	$38,490	$26,872	$39,667	$206,344

26-Weeks Ended June 26, 2010

Net sales	$139,233	$105,819	$115,625	$668,149	$131,007	$1,159,833
Gross profit	$91,768	$65,557	$73,338	$300,110	$91,788	$622,561
Operating income	$62,404	$38,923	$41,075	$105,530	$37,459	$285,391

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