Company reports record second quarter revenue
and raises full year guidance
SCHAFFHAUSEN, Switzerland, July 31,
2024 /PRNewswire/ -- Garmin® Ltd. (NYSE:
GRMN), today announced results for the second quarter ended
June 29, 2024.
Highlights for second quarter 2024 include:
- Consolidated revenue of $1.51
billion, a 14% increase compared to the prior year
quarter
- Gross and operating margins were 57.3% and 22.7%,
respectively
- Operating income of $342 million,
a 20% increase compared to the prior year quarter
- GAAP EPS of $1.56 and pro forma
EPS(1) of $1.58,
representing 9% growth in pro forma EPS over the prior year
quarter
- Shipped our one millionth domain controller to Auto OEM
customers
- Garmin Health has supported over 1,000 research studies in
areas such as sleep, well-being, rehabilitation and physical
activity
- Surpassed 20,000 dedicated associates around the globe who are
driving our growth and innovation
- Named one of the "Top 10 Best Workplaces for College Grads" on
Forbes 2024 America's Best Employers for New Grads
- Recognized as one of the "US News Best Companies to Work For"
by US News & World Report
|
(In thousands, except
per share information)
|
|
13-Weeks
Ended
|
|
|
26-Weeks
Ended
|
|
|
|
June
29,
|
|
|
July
1,
|
|
|
YoY
|
|
|
June
29,
|
|
|
July
1,
|
|
|
YoY
|
|
|
|
2024
|
|
|
2023
|
|
|
Change
|
|
|
2024
|
|
|
2023
|
|
|
Change
|
|
|
Net sales
|
|
$
|
1,506,671
|
|
|
$
|
1,320,795
|
|
|
14 %
|
|
|
$
|
2,888,320
|
|
|
$
|
2,468,219
|
|
|
17 %
|
|
|
Fitness
|
|
|
428,404
|
|
|
|
334,863
|
|
|
28 %
|
|
|
|
771,296
|
|
|
|
579,584
|
|
|
33 %
|
|
|
Outdoor
|
|
|
439,872
|
|
|
|
448,114
|
|
|
(2) %
|
|
|
|
806,065
|
|
|
|
776,776
|
|
|
4 %
|
|
|
Aviation
|
|
|
218,253
|
|
|
|
217,454
|
|
|
0 %
|
|
|
|
435,108
|
|
|
|
431,036
|
|
|
1 %
|
|
|
Marine
|
|
|
272,953
|
|
|
|
215,802
|
|
|
26 %
|
|
|
|
599,689
|
|
|
|
494,777
|
|
|
21 %
|
|
|
Auto OEM
|
|
|
147,189
|
|
|
|
104,562
|
|
|
41 %
|
|
|
|
276,162
|
|
|
|
186,046
|
|
|
48 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
%
|
|
|
57.3
|
%
|
|
|
57.5
|
%
|
|
|
|
|
|
|
57.6
|
%
|
|
|
57.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
%
|
|
|
22.7
|
%
|
|
|
21.5
|
%
|
|
|
|
|
|
|
22.2
|
%
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted
EPS
|
|
$
|
1.56
|
|
|
$
|
1.50
|
|
|
4 %
|
|
|
$
|
2.99
|
|
|
$
|
2.56
|
|
|
17 %
|
|
|
Pro forma diluted
EPS(1)
|
|
$
|
1.58
|
|
|
$
|
1.45
|
|
|
9 %
|
|
|
$
|
3.00
|
|
|
$
|
2.47
|
|
|
21 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See attached
Non-GAAP Financial Information for discussion and reconciliation of
non-GAAP financial measures, including pro forma diluted
EPS
|
|
Executive Overview from Cliff Pemble, President and
Chief Executive Officer:
"Garmin delivered another impressive quarter of growth in both
revenue and operating profit, made possible by an innovative
product lineup and the strength of our diversified business
model. We are pleased with our results so far in 2024, which
have exceeded our expectations and give us confidence to raise our
full year revenue and EPS guidance." - Cliff Pemble, President and Chief Executive
Officer of Garmin Ltd.
Fitness:
Revenue from the fitness segment increased 28% in the
second quarter primarily driven by growth in wearables. Gross
and operating margins were 57% and 25%, respectively,
resulting in $108 million of operating income. During the
quarter, we launched the Edge® 1050 premium cycling
computer with a vivid color touchscreen display, a built-in speaker
for audible feedback, and Garmin Pay
contactless payments. Also during the quarter, we celebrated
Global Running Day with Garmin users running nearly 11 million
miles, beating last year by more than 2 million miles.
Outdoor:
Revenue from the outdoor segment decreased 2% in the second
quarter primarily due to declines in adventure watches. Gross and
operating margins were 65% and 31%, respectively, resulting in
$136 million of operating income. During the quarter, we
launched the Approach® Z30 smart laser range finder with
the Range Relay feature, which sends distance measurements to a
compatible Garmin smartwatch or the Garmin Golf™
smartphone app. We also launched our first cellular based dog
tracking collar, Alpha® LTE.
Aviation:
Revenue from the aviation segment was relatively flat in the
second quarter driven by growth in OEM product categories
offset by declines in aftermarket product categories. Gross and
operating margins were 74% and 23%, respectively, resulting in
$50 million of operating income. For the ninth consecutive
year, we were recognized by Embraer as a Best Supplier, most
recently in the Electrical & Electrical Systems category for
our G3000® Prodigy Touch flight deck systems in the Phenom 100EV
and Phenom 300E.
Marine:
Revenue from the marine segment increased 26% in the second
quarter primarily driven by the acquisition of JL
Audio®. Gross and operating margins were 54% and
22%, respectively, resulting in $60 million of operating
income. We recently expanded the Force® Kraken trolling
motor series, adding a 48-inch shaft length to accommodate a
broader range of boats. We also introduced a new
Panoptix™ PS-22 Ice Fishing Bundle, an ultraportable
live sonar solution for winter fishing, which won a Best of
Category award at ICAST, the world's largest sportfishing trade
show. Additionally in the quarter, we were selected as the
exclusive marine electronics and audio supplier for Independent
Boat Builders, Inc. through 2029.
Auto OEM:
Revenue from the auto OEM segment increased 41% during the
second quarter primarily driven by growth in domain
controllers. Gross margin was 16% and the operating loss
decreased to $12 million. We recently received the, "2024
Global Award for excellence in Technology and Development" from
Yamaha Motor, recognized for our motorcycle infotainment
solutions.
Additional Financial Information:
Total operating expenses in the second quarter were $521 million, a 10% increase over the prior year.
Research and development increased 8% primarily due to engineering
personnel costs. Selling, general and administrative expenses
increased 11% driven primarily by personnel related costs,
including the impact of the acquisition of JL Audio.
The effective tax rate in the second quarter was 17.9%
compared to 8.9% in the prior year quarter. The year-over-year
increase in the effective tax rate is primarily due to the increase
in the combined federal and cantonal Switzerland statutory tax rate in response to
global minimum tax requirements.
In the second quarter of 2024, we generated operating cash flows
of $255 million and free cash
flow(1) of $218 million.
We paid a quarterly dividend of approximately $144 million and repurchased $10 million of the Company's shares within the
quarter, leaving approximately $290
million remaining as of June 29,
2024 in the share repurchase program authorized through
December 2026. We ended the quarter
with cash and marketable securities of approximately $3.4 billion.
|
(1)
|
See attached Non-GAAP
Financial Information for discussion and reconciliation of non-GAAP
financial measures, including free cash flow.
|
2024 Fiscal Year Guidance:
Based on our performance in the first half of 2024, we are
adjusting our full year guidance. We now anticipate revenue of
approximately $5.95 billion and pro
forma EPS of $6.00 based on gross
margin of 57.0%, operating margin of 21.3% and a full year
effective tax rate of 16.0% (see attached discussion on
Forward-looking Financial Measures).
Dividend Recommendation:
The board of directors has established September 27, 2024, as the payment date for the
next dividend installment of $0.75
per share with a record date of September
13, 2024. At the 2024 annual shareholders' meeting, Garmin
shareholders, in accordance with Swiss corporate law, approved a
cash dividend in the total amount of $3.00 per share, payable in four equal
installments on dates to be determined by the board in its
discretion. The first payment was made on June 28, 2024. The board currently anticipates
the scheduling of the remaining quarterly dividend installments as
follows:
|
Dividend
Date
|
|
Record Date
|
|
$s per share
|
|
December 27,
2024
|
|
December 13,
2024
|
|
$0.75
|
|
March 28,
2025
|
|
March 14,
2025
|
|
$0.75
|
Webcast Information/Forward-Looking Statements:
The information for Garmin Ltd.'s earnings call is as
follows:
|
When:
|
Wednesday, July 31,
2024 at 10:30 a.m. Eastern
|
|
Where:
|
Join a live stream of
the call at the following link
https://www.garmin.com/en-US/investors/events/
|
An archive of the live webcast will be available until
July 30, 2025 on the Garmin website
at www.garmin.com. To access the replay, click on the Investors
link and click over to the Events Calendar page.
This release includes projections and other
forward-looking statements regarding Garmin Ltd. and its business
that are commonly identified by words such as "anticipates,"
"would," "may," "expects," "estimates," "plans," "intends,"
"projects," and other words or phrases with similar meanings. Any
statements regarding the Company's expected fiscal 2024 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, potential future
acquisitions, share repurchase programs, currency movements,
expenses, pricing, new product launches, market reach, 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 30,
2023 filed by Garmin with the Securities and Exchange
Commission (Commission file number 001-41118). A copy of
Garmin's 2023 Form 10-K can be downloaded
from https://www.garmin.com/en-US/investors/sec/. All
information provided in this release and in the attachments is as
of June 29, 2024. Undue
reliance should not be placed on the forward-looking statements in
this press release, which are based on information available to us
on the date hereof. We undertake no duty to update this information
unless required by law.
This release and the attachments contain non-GAAP financial
measures. A reconciliation to the nearest GAAP measure and a
discussion of the Company's use of these measures are included in
the attachments.
Garmin, the Garmin logo, the Garmin delta, Alpha, Approach,
Edge, Force, and JL Audio are trademarks of Garmin Ltd. or its
subsidiaries and are registered in one or more countries, including
the U.S. Garmin Golf, and Panoptix 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.
|
Investor Relations
Contact:
|
Media Relations
Contact:
|
|
Teri Seck
|
Krista
Klaus
|
|
913/397-8200
|
913/397-8200
|
|
investor.relations@garmin.com
|
media.relations@garmin.com
|
Change in Operating Expense
Presentation
Certain prior period information presented here has been recast
to conform to the current period presentation. In the first quarter
of 2024, the Company changed the presentation of operating expense
to include advertising expense within selling, general, and
administrative expenses on the Company's condensed consolidated
statements of income, which management believes to be a more
meaningful presentation. This change in presentation had no effect
on the Company's consolidated operating or net income.
|
Garmin Ltd. and
Subsidiaries
|
|
|
Condensed
Consolidated Statements of Income (Unaudited)
|
|
|
(In thousands,
except per share information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks
Ended
|
|
|
26-Weeks
Ended
|
|
|
|
June
29,
|
|
|
July
1,
|
|
|
June
29,
|
|
|
July
1,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Net sales
|
|
$
|
1,506,671
|
|
|
$
|
1,320,795
|
|
|
$
|
2,888,320
|
|
|
$
|
2,468,219
|
|
|
Cost of goods
sold
|
|
|
643,780
|
|
|
|
561,353
|
|
|
|
1,223,290
|
|
|
|
1,055,983
|
|
|
Gross profit
|
|
|
862,891
|
|
|
|
759,442
|
|
|
|
1,665,030
|
|
|
|
1,412,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expense
|
|
|
243,151
|
|
|
|
224,394
|
|
|
|
485,686
|
|
|
|
445,878
|
|
|
Selling, general and
administrative expenses
|
|
|
277,713
|
|
|
|
250,693
|
|
|
|
538,907
|
|
|
|
485,021
|
|
|
Total operating
expense
|
|
|
520,864
|
|
|
|
475,087
|
|
|
|
1,024,593
|
|
|
|
930,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
342,027
|
|
|
|
284,355
|
|
|
|
640,437
|
|
|
|
481,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
29,286
|
|
|
|
18,760
|
|
|
|
54,313
|
|
|
|
34,659
|
|
|
Foreign currency
(losses) gains
|
|
|
(4,828)
|
|
|
|
10,797
|
|
|
|
(2,547)
|
|
|
|
18,484
|
|
|
Other (expense)
income
|
|
|
(513)
|
|
|
|
2,064
|
|
|
|
809
|
|
|
|
3,268
|
|
|
Total other income
(expense)
|
|
|
23,945
|
|
|
|
31,621
|
|
|
|
52,575
|
|
|
|
56,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
365,972
|
|
|
|
315,976
|
|
|
|
693,012
|
|
|
|
537,748
|
|
|
Income tax
provision
|
|
|
65,342
|
|
|
|
28,037
|
|
|
|
116,421
|
|
|
|
47,482
|
|
|
Net income
|
|
$
|
300,630
|
|
|
$
|
287,939
|
|
|
$
|
576,591
|
|
|
$
|
490,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.57
|
|
|
$
|
1.51
|
|
|
$
|
3.00
|
|
|
$
|
2.56
|
|
|
Diluted
|
|
$
|
1.56
|
|
|
$
|
1.50
|
|
|
$
|
2.99
|
|
|
$
|
2.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
192,074
|
|
|
|
191,293
|
|
|
|
191,982
|
|
|
|
191,395
|
|
|
Diluted
|
|
|
192,899
|
|
|
|
191,597
|
|
|
|
192,808
|
|
|
|
191,741
|
|
|
Garmin Ltd. and
Subsidiaries
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
29,
2024
|
|
|
December 30,
2023
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,937,483
|
|
|
$
|
1,693,452
|
|
|
Marketable
securities
|
|
|
288,659
|
|
|
|
274,618
|
|
|
Accounts receivable,
net
|
|
|
808,446
|
|
|
|
815,243
|
|
|
Inventories
|
|
|
1,319,643
|
|
|
|
1,345,955
|
|
|
Deferred
costs
|
|
|
20,946
|
|
|
|
16,316
|
|
|
Prepaid expenses and
other current assets
|
|
|
322,041
|
|
|
|
318,556
|
|
|
Total current
assets
|
|
|
4,697,218
|
|
|
|
4,464,140
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
1,206,020
|
|
|
|
1,224,097
|
|
|
Operating lease
right-of-use assets
|
|
|
130,302
|
|
|
|
143,724
|
|
|
Noncurrent marketable
securities
|
|
|
1,192,190
|
|
|
|
1,125,191
|
|
|
Deferred income tax
assets
|
|
|
777,019
|
|
|
|
754,635
|
|
|
Noncurrent deferred
costs
|
|
|
8,921
|
|
|
|
11,057
|
|
|
Goodwill
|
|
|
599,606
|
|
|
|
608,474
|
|
|
Other intangible
assets, net
|
|
|
168,392
|
|
|
|
186,601
|
|
|
Other noncurrent
assets
|
|
|
103,654
|
|
|
|
85,650
|
|
|
Total assets
|
|
$
|
8,883,322
|
|
|
$
|
8,603,569
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
331,938
|
|
|
$
|
253,790
|
|
|
Salaries and benefits
payable
|
|
|
172,284
|
|
|
|
190,014
|
|
|
Accrued warranty
costs
|
|
|
58,253
|
|
|
|
55,738
|
|
|
Accrued sales program
costs
|
|
|
90,191
|
|
|
|
98,610
|
|
|
Other accrued
expenses
|
|
|
196,381
|
|
|
|
245,874
|
|
|
Deferred
revenue
|
|
|
105,999
|
|
|
|
101,189
|
|
|
Income taxes
payable
|
|
|
236,708
|
|
|
|
225,475
|
|
|
Dividend
payable
|
|
|
432,569
|
|
|
|
139,997
|
|
|
Total current
liabilities
|
|
|
1,624,323
|
|
|
|
1,310,687
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax
liabilities
|
|
|
102,951
|
|
|
|
114,682
|
|
|
Noncurrent income taxes
payable
|
|
|
16,480
|
|
|
|
16,521
|
|
|
Noncurrent deferred
revenue
|
|
|
31,848
|
|
|
|
36,148
|
|
|
Noncurrent operating
lease liabilities
|
|
|
102,167
|
|
|
|
113,035
|
|
|
Other noncurrent
liabilities
|
|
|
571
|
|
|
|
436
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
Common shares (194,901
and 195,880 shares authorized and issued;
192,251 and 191,777 shares outstanding)
|
|
|
19,490
|
|
|
|
19,588
|
|
|
Additional paid-in
capital
|
|
|
2,183,158
|
|
|
|
2,125,467
|
|
|
Treasury shares (2,650
and 4,103 shares)
|
|
|
(223,899)
|
|
|
|
(330,909)
|
|
|
Retained
earnings
|
|
|
5,164,227
|
|
|
|
5,263,528
|
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(137,994)
|
|
|
|
(65,614)
|
|
|
Total stockholders'
equity
|
|
|
7,004,982
|
|
|
|
7,012,060
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
8,883,322
|
|
|
$
|
8,603,569
|
|
|
Garmin Ltd. and
Subsidiaries
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Weeks
Ended
|
|
|
|
June 29,
2024
|
|
|
July 1,
2023
|
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
576,591
|
|
|
$
|
490,266
|
|
|
Adjustments to
reconcile net income to net cash provided by
operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
67,890
|
|
|
|
64,816
|
|
|
Amortization
|
|
|
21,047
|
|
|
|
22,788
|
|
|
Loss (gain) on sale or
disposal of property and equipment
|
|
|
128
|
|
|
|
(124)
|
|
|
Unrealized foreign
currency losses (gains)
|
|
|
3,165
|
|
|
|
(13,054)
|
|
|
Deferred income
taxes
|
|
|
(35,778)
|
|
|
|
(68,859)
|
|
|
Stock compensation
expense
|
|
|
65,983
|
|
|
|
43,397
|
|
|
Realized loss on
marketable securities
|
|
|
29
|
|
|
|
59
|
|
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
|
(8,600)
|
|
|
|
(62,832)
|
|
|
Inventories
|
|
|
(11,368)
|
|
|
|
111,531
|
|
|
Other current and
noncurrent assets
|
|
|
(39,759)
|
|
|
|
2,769
|
|
|
Accounts
payable
|
|
|
92,065
|
|
|
|
45,206
|
|
|
Other current and
noncurrent liabilities
|
|
|
(62,099)
|
|
|
|
(39,484)
|
|
|
Deferred
revenue
|
|
|
667
|
|
|
|
4,711
|
|
|
Deferred
costs
|
|
|
(2,516)
|
|
|
|
(990)
|
|
|
Income
taxes
|
|
|
23,181
|
|
|
|
(47,288)
|
|
|
Net cash provided by
operating activities
|
|
|
690,626
|
|
|
|
552,912
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(70,325)
|
|
|
|
(99,346)
|
|
|
Purchase of marketable
securities
|
|
|
(281,297)
|
|
|
|
(68,978)
|
|
|
Redemption of
marketable securities
|
|
|
203,775
|
|
|
|
98,885
|
|
|
Net cash from (payments
for) acquisitions
|
|
|
5,011
|
|
|
|
—
|
|
|
Other investing
activities, net
|
|
|
(321)
|
|
|
|
(695)
|
|
|
Net cash used in
investing activities
|
|
|
(143,157)
|
|
|
|
(70,134)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
(284,246)
|
|
|
|
(279,442)
|
|
|
Proceeds from issuance
of treasury shares related to equity awards
|
|
|
24,530
|
|
|
|
21,946
|
|
|
Purchase of treasury
shares related to equity awards
|
|
|
(16,264)
|
|
|
|
(9,397)
|
|
|
Purchase of treasury
shares under share repurchase plan
|
|
|
(9,713)
|
|
|
|
(70,181)
|
|
|
Net cash used in
financing activities
|
|
|
(285,693)
|
|
|
|
(337,074)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
(17,761)
|
|
|
|
599
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash,
cash equivalents, and restricted cash
|
|
|
244,015
|
|
|
|
146,303
|
|
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
|
|
1,694,156
|
|
|
|
1,279,912
|
|
|
Cash, cash equivalents,
and restricted cash at end of period
|
|
$
|
1,938,171
|
|
|
$
|
1,426,215
|
|
|
Garmin Ltd. and
Subsidiaries
Net Sales, Gross Profit and Operating Income by Segment
(Unaudited)
(In thousands)
|
|
|
|
Fitness
|
|
|
Outdoor
|
|
|
Aviation
|
|
|
Marine
|
|
|
Auto
OEM
|
|
|
Total
|
|
|
13-Weeks Ended June
29, 2024
|
|
|
Net sales
|
|
$
|
428,404
|
|
|
$
|
439,872
|
|
|
$
|
218,253
|
|
|
$
|
272,953
|
|
|
$
|
147,189
|
|
|
$
|
1,506,671
|
|
|
Gross profit
|
|
|
245,248
|
|
|
|
284,214
|
|
|
|
161,366
|
|
|
|
147,787
|
|
|
|
24,276
|
|
|
|
862,891
|
|
|
Operating income
(loss)
|
|
|
107,610
|
|
|
|
135,592
|
|
|
|
50,485
|
|
|
|
59,892
|
|
|
|
(11,552)
|
|
|
|
342,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks Ended July
1, 2023
|
|
|
Net sales
|
|
$
|
334,863
|
|
|
$
|
448,114
|
|
|
$
|
217,454
|
|
|
$
|
215,802
|
|
|
$
|
104,562
|
|
|
$
|
1,320,795
|
|
|
Gross profit
|
|
|
173,163
|
|
|
|
280,078
|
|
|
|
160,957
|
|
|
|
120,344
|
|
|
|
24,900
|
|
|
|
759,442
|
|
|
Operating income
(loss)
|
|
|
54,458
|
|
|
|
138,255
|
|
|
|
62,766
|
|
|
|
46,377
|
|
|
|
(17,501)
|
|
|
|
284,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Weeks Ended June
29, 2024
|
|
|
Net sales
|
|
$
|
771,296
|
|
|
$
|
806,065
|
|
|
$
|
435,108
|
|
|
$
|
599,689
|
|
|
$
|
276,162
|
|
|
$
|
2,888,320
|
|
|
Gross profit
|
|
|
440,050
|
|
|
|
526,953
|
|
|
|
323,992
|
|
|
|
327,039
|
|
|
|
46,996
|
|
|
|
1,665,030
|
|
|
Operating income
(loss)
|
|
|
175,743
|
|
|
|
242,543
|
|
|
|
102,619
|
|
|
|
147,583
|
|
|
|
(28,051)
|
|
|
|
640,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Weeks Ended July
1, 2023
|
|
|
Net sales
|
|
$
|
579,584
|
|
|
$
|
776,776
|
|
|
$
|
431,036
|
|
|
$
|
494,777
|
|
|
$
|
186,046
|
|
|
$
|
2,468,219
|
|
|
Gross profit
|
|
|
294,073
|
|
|
|
485,026
|
|
|
|
315,410
|
|
|
|
269,976
|
|
|
|
47,751
|
|
|
|
1,412,236
|
|
|
Operating income
(loss)
|
|
|
65,036
|
|
|
|
214,999
|
|
|
|
120,460
|
|
|
|
118,285
|
|
|
|
(37,443)
|
|
|
|
481,337
|
|
|
Garmin Ltd. and
Subsidiaries
|
|
|
Net Sales by
Geography (Unaudited)
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks
Ended
|
|
|
26-Weeks
Ended
|
|
|
|
June
29,
|
|
|
July
1,
|
|
|
YoY
|
|
|
June
29,
|
|
|
July
1,
|
|
|
YoY
|
|
|
|
2024
|
|
|
2023
|
|
|
Change
|
|
|
2024
|
|
|
2023
|
|
|
Change
|
|
|
Net sales
|
|
$
|
1,506,671
|
|
|
$
|
1,320,795
|
|
|
14 %
|
|
|
$
|
2,888,320
|
|
|
$
|
2,468,219
|
|
|
17 %
|
|
|
Americas
|
|
|
740,577
|
|
|
|
641,848
|
|
|
15 %
|
|
|
|
1,456,694
|
|
|
|
1,253,552
|
|
|
16 %
|
|
|
EMEA
|
|
|
542,016
|
|
|
|
457,550
|
|
|
18 %
|
|
|
|
1,005,399
|
|
|
|
813,403
|
|
|
24 %
|
|
|
APAC
|
|
|
224,078
|
|
|
|
221,397
|
|
|
1 %
|
|
|
|
426,227
|
|
|
|
401,264
|
|
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA - Europe, Middle
East and Africa; APAC - Asia Pacific and Australian
Continent
|
|
Non-GAAP Financial Information
To supplement our financial results presented in accordance with
GAAP, this release includes the following measures defined by the
Securities and Exchange Commission as non-GAAP financial measures:
pro forma effective tax rate, pro forma net income (earnings) per
share and free cash flow. These non-GAAP measures are not based on
any comprehensive set of accounting rules or principles and should
not be considered a substitute for, or superior to, financial
measures calculated in accordance with GAAP, and may be different
from non-GAAP measures used by other companies, limiting the
usefulness of the measures for comparison with other companies.
Management believes providing investors with an operating view
consistent with how it manages the Company provides enhanced
transparency into the operating results of the Company, as
described in more detail by category below.
The tables below provide reconciliations between the GAAP and
non-GAAP measures.
Pro forma effective tax rate
The Company's income tax expense is periodically impacted by
discrete tax items that are not reflective of income tax expense
incurred as a result of current period earnings. Therefore,
management believes the effective tax rate and income tax provision
before the effect of certain discrete tax items are important
measures to permit investors' consistent comparison between
periods. In the first half 2024 and 2023 there were no such
discrete tax items identified.
Pro forma net income (earnings) per share
Management believes net income (earnings) per share before the
impact of foreign currency gains or losses and certain discrete
income tax items, as discussed above, is an important measure to
permit a consistent comparison of the Company's performance between
periods.
|
(In thousands, except
per share information)
|
|
13-Weeks
Ended
|
|
|
26-Weeks
Ended
|
|
|
|
June
29,
|
|
|
July
1,
|
|
|
June
29,
|
|
|
July
1,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
GAAP net
income
|
|
$
|
300,630
|
|
|
$
|
287,939
|
|
|
$
|
576,591
|
|
|
$
|
490,266
|
|
|
Foreign currency gains
/ losses(1)
|
|
|
4,828
|
|
|
|
(10,797)
|
|
|
|
2,547
|
|
|
|
(18,484)
|
|
|
Tax effect of foreign
currency gains / losses(2)
|
|
|
(862)
|
|
|
|
958
|
|
|
|
(428)
|
|
|
|
1,632
|
|
|
Pro forma net
income
|
|
$
|
304,596
|
|
|
$
|
278,100
|
|
|
$
|
578,710
|
|
|
$
|
473,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.57
|
|
|
$
|
1.51
|
|
|
$
|
3.00
|
|
|
$
|
2.56
|
|
|
Diluted
|
|
$
|
1.56
|
|
|
$
|
1.50
|
|
|
$
|
2.99
|
|
|
$
|
2.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.59
|
|
|
$
|
1.45
|
|
|
$
|
3.01
|
|
|
$
|
2.47
|
|
|
Diluted
|
|
$
|
1.58
|
|
|
$
|
1.45
|
|
|
$
|
3.00
|
|
|
$
|
2.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
192,074
|
|
|
|
191,293
|
|
|
|
191,982
|
|
|
|
191,395
|
|
|
Diluted
|
|
|
192,899
|
|
|
|
191,597
|
|
|
|
192,808
|
|
|
|
191,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Foreign currency
gains and losses for the Company are driven by movements of a
number of currencies in relation to the U.S.
Dollar and the related exchange rate impact on the significant
cash, receivables, and payables held in a currency other than
the
functional currency at a given legal entity. However, there
is minimal cash impact from such foreign currency gains and
losses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) The tax effect of
foreign currency gains was calculated using the effective tax rate
of 17.9% and 16.8% for the 13-weeks and
26-weeks ended June 29, 2024 and 8.9% and 8.8% for the 13-weeks and
26-weeks ended July 1, 2023.
|
|
Free cash flow
Management believes free cash flow is an important liquidity
measure because it represents the amount of cash provided by
operations that is available for investing and defines it as
operating cash flows less capital expenditures for property and
equipment. Management believes excluding purchases of property and
equipment provides a better understanding of the underlying trends
in the Company's operations and allows more accurate comparisons of
the Company's results between periods. This metric may also be
useful to investors but should not be considered in isolation as it
is not a measure of cash flow available for discretionary
expenditures. The most comparable GAAP measure is net cash provided
by operating activities.
|
(In
thousands)
|
|
13-Weeks
Ended
|
|
|
26-Weeks
Ended
|
|
|
|
June
29,
|
|
|
July
1,
|
|
|
June
29,
|
|
|
July
1,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Net cash provided by
operating activities
|
|
$
|
255,321
|
|
|
$
|
273,702
|
|
|
$
|
690,626
|
|
|
$
|
552,912
|
|
|
Less: purchases of
property and equipment
|
|
|
(37,157)
|
|
|
|
(52,533)
|
|
|
|
(70,325)
|
|
|
|
(99,346)
|
|
|
Free Cash
Flow
|
|
$
|
218,164
|
|
|
$
|
221,169
|
|
|
$
|
620,301
|
|
|
$
|
453,566
|
|
Forward-looking Financial Measures
The forward-looking financial measures in our 2024 guidance
provided above do not consider the potential future net effect of
foreign currency exchange gains and losses, certain discrete tax
items and any other impacts that may be identified as pro forma
adjustments in calculating the non-GAAP measures described
above.
The estimated impact of foreign currency gains and losses cannot
be reasonably estimated on a forward-looking basis due to the high
variability and low visibility with respect to non-operating
foreign currency exchange gains and losses and the related tax
effects of such gains and losses. The impact on diluted net income
per share of foreign currency gains and losses, net of tax effects,
was $0.01 per share for the 26-weeks
ended June 29, 2024.
At this time, management is unable to determine whether or not
significant discrete tax items will occur in fiscal 2024, estimate
the impact of any such items, or anticipate the impact of any other
events that may be considered in the calculation of non-GAAP
financial measures.
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SOURCE Garmin Ltd.