Garmin revenue for the quarter increased 32% to $189.7 million from $143.5 million in the year-ago quarter. Net income was $56.3 million, or $0.52 diluted earnings per share, compared to $47.2 million or $0.43 diluted earnings per share in the year-ago quarter. Second quarter net income included a $3.6 million foreign currency gain as a result of a stronger U.S. dollar compared to the Taiwan dollar. Excluding the effects of foreign currency, diluted EPS for the quarter was $0.49 compared to $0.44 in the year-ago quarter, exceeding the high end of management's guidance of $0.44 to $0.48.
“We are pleased to announce another quarter of solid revenue growth. Demand for our products continues strong, driven by increased demand across all product lines,” said Dr. Min Kao, CEO of Garmin Ltd. “The consumer segment recorded a 30 percent growth in revenues during this quarter despite severe component availability constraints. The introduction of 36 new and innovative products during the first half of 2004 has generated excitement in our core markets, and our new product pipeline remains robust. Our StreetPilots, marine network systems, 60C, 76C, 276C, and 296C are just a few of the products we have introduced which provide consumers with many options for navigation. We also began shipping our first G1000(TM) avionics in the second quarter of 2004.”
Consumer revenue for the second quarter totaled $148.5 million – a 30% growth compared to the second quarter of 2003. In addition, aviation revenue totaled $41.2 million – a 41 percent increase compared to the year-ago quarter. Total units sold for the quarter increased to 569,000 from 513,000 – representing an increase of 11 percent.
Revenue increased across all geographic regions during the second quarter of fiscal 2004 when compared to the year-ago quarter
North America revenue was $125.7 million compared to $100.3 million, up 25 percent. Europe revenue was $56.3 million compared to $37.0 million, up 52 percent. Asia revenue was $7.7 million compared to $6.2 million, up 24 percent.
“We are pleased with the quarter's overall financial performance,” said Kevin Rauckman, chief financial officer of Garmin Ltd. “Our consumer segment has now logged its eleventh consecutive quarter of year-over-year revenue growth in excess of 20%. Our aviation segment has also demonstrated growth with the introduction of both panel-mount and portable products. The many new products released in the first half of 2004 should fuel strong growth in the second half of the year. Gross margins improved during the second quarter of 2004 to 51.8% from 50.8% in the first quarter of 2004. Improved product mix within both aviation and consumer segments offset by additional product transition costs during the quarter accounted for the increase in gross margins.”
Revenue for the six-month period ending June 26, 2004 was $348.0 million – up 30 percent from the $267.3 million generated in the year-ago. Net income increased to $91.0 million or $0.83 diluted earnings per share, compared to $88.7 million or $0.81 diluted earnings per share in the year-ago period. Net income for the six-month period ended June 26, 2004 included a $3.9 million foreign currency loss as a result of a weaker U.S. dollar compared to the Taiwan dollar. Excluding the effects of foreign currency, diluted EPS for the period was $0.86 compared to $0.83 in the year-ago period.
Consumer revenue for the six-month period totaled $271.9 million – a 30 percent growth compared to the year-ago period. Aviation revenue totaled $76.1 million – a 32 percent increase compared to the same period in fiscal 2003. Total units sold for the period increased to 1,048,000 from 959,000 – representing an increase of 9 percent.
Revenue increased across all geographic regions during the six months ending June 26, 2004 when compared with the same period in 2003.
North America revenue was $233.0 million compared to $185.6 million, up 26 percent. Europe revenue was $100.2 million compared to $70.5 million, up 42 percent. Asia revenue was $14.8 million compared to $11.2 million, up 32 percent.
The company estimates that its diluted EPS for the third fiscal quarter of 2004, excluding effects for foreign currency, will be in the range of $0.42 to $0.45 on revenues of $167 million to $174 million.
The company estimates that its diluted EPS for fiscal year 2004, excluding effects for foreign currency, will be in the range of $1.79 to $1.85 on revenues of $718 million to $732 million.
“We are also pleased to report that the Garmin Board of Directors has approved a $0.50/share annual cash dividend payable to shareholders of record on December 1, 2004,” announced Dr. Kao. “This dividend will be paid on December 15, 2004.” The payment of future dividends will be at the discretion of the Board of Directors after taking into account various factors including operating results, anticipated needs and plans for acquisition or expansion.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 26, December 27,
2004 2003
Assets
Current assets:
Cash and cash equivalents $242,716 $274,329
Marketable securities 62,610 53,127
Accounts receivable, net 98,638 82,718
Inventories 89,866 96,794
Deferred income taxes 27,699 26,812
Prepaid expenses and other current assets 21,168 6,148
Total current assets 542,697 539,928
Property and equipment, net 141,074 104,784
Restricted cash 1,603 1,602
Marketable securities 221,415 168,320
Other assets, net 62,177 42,311
Total assets $968,966 $856,945
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $40,587 $40,671
Other accrued expenses 33,711 24,817
Income taxes payable 50,188 38,946
Total current liabilities 124,486 104,434
Deferred income taxes 615 2,821
Stockholders' equity:
Common stock 1,081 1,082
Additional paid-in capital 101,969 104,022
Retained earnings 754,574 663,604
Accumulated other comprehensive loss (13,759) (19,018)
Total stockholders' equity 843,865 749,690
Total liabilities and stockholders' equity $968,966 $856,945
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share information)
(Unaudited)
13-Weeks Ended 26-Weeks Ended
June 26, June 28, June 26, June 28,
2004 2003 2004 2003
Net sales $189,655 $143,495 $347,984 $267,283
Cost of goods sold 91,336 59,838 169,214 108,970
Gross profit 98,319 83,657 178,770 158,313
Selling, general and
administrative expenses 19,401 13,935 36,043 27,529
Research and development
expense 14,710 9,607 28,929 18,403
34,111 23,542 64,972 45,932
Operating income 64,208 60,115 113,798 112,381
Other income(expense)(A) 5,637 (1,057) (85) (227)
Income before income taxes 69,845 59,058 113,713 112,154
Income tax provision 13,530 11,812 22,743 23,413
Net income $56,315 $47,245 $90,970 $88,741
Net income per share:
Basic $0.52 $0.44 $0.84 $0.82
Diluted $0.52 $0.43 $0.83 $0.81
Weighted average common
shares outstanding:
Basic 108,161 107,995 108,179 107,972
Diluted 108,884 109,038 109,052 108,888
