SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): October 30, 2002
GARMIN LTD.
(Exact name of registrant as specified in its charter)
Cayman Islands 0-31983 98-0229227
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
P.O. Box 30464 SMB
5th Floor, Harbour Place
103 South Church Street
George Town, Grand Cayman, Cayman Islands
(Address of principal executive offices)
Registrant's telephone number, including area code: (345) 946-5203*
Not Applicable
(Former name or former address, if changed since last report)
--------
* The executive offices of the Registrant's principal United States subsidiary
are located at 1200 East 151st Street, Olathe, Kansas 66062.
The telephone number there is (913) 397-8200.
Item 9. Regulation FD Disclosure
See attached as Exhibit 99.1 to this Form 8-K a press release dated October
30, 2002 concerning the announcement of financial results for the fiscal quarter
ended September 28, 2002.
The information in this Form 8-K, including the exhibits, is furnished
pursuant to Item 9 and shall not be deemed to be 'filed' for the purposes of
Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the
liabilities of that Section.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GARMIN LTD.
Date: October 30, 2002 /s/ Andrew R. Etkind
----------------------------------------
Andrew R. Etkind
General Counsel and Secretary
EXHIBIT INDEX
Exhibit No. Description
99.1 Press release dated October 30, 2002
concerning the announcement of
financial results for the fiscal quarter
ended September 28, 2002.
Exhibit 99.1
Garmin Reports Record Third Quarter and Revises 2002 Guidance Upward
CAYMAN ISLANDS, October 30, 2002/PRNewswire/ -- Garmin Ltd. (Nasdaq: GRMN -
news) today announced record revenue and earnings for its third fiscal quarter
ended September 28, 2002. Revenue for the quarter increased 24 percent to $107.8
million from $86.9 million in the year-ago quarter. Net income increased to
$38.4 million, or $0.36 diluted earnings per share, compared to $25.0 million or
$0.23 diluted earnings per share in the year-ago quarter. Third quarter net
income included a $9.6 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 $0.29 compared to $0.23 in the
year-ago quarter. The diluted EPS of $0.29 recorded for the third quarter of
2002 exceeded company guidance of $0.23 to $0.25.
'We are pleased to announce another solid quarter of growth. Overall demand for
our products remains strong,' said Dr. Min Kao, CEO of Garmin Ltd. 'On the heels
of 32 percent revenue growth last quarter, our consumer segment recorded a 25
percent growth in revenues during this quarter, as we continue to exhibit
strength across all of our consumer product lines. Additionally, we experienced
a 26% growth in EPS when excluding the effects of foreign currency from the
prior year quarter. As consumer awareness of the utility of GPS navigation
steadily increases, we have experienced continued growth in our core markets, as
well as our emerging automotive product line.'
Consumer revenue for the third quarter totaled $80.2 million - a 25 percent
growth compared to the third quarter of 2001. Aviation revenue totaled $27.6
million - a 20.6 percent increase compared to the year-ago quarter. Total units
sold for the quarter increased to 378,000 from 311,000 - representing an
increase of 21.5 percent.
Revenue increased across all geographic regions during the third quarter of
fiscal 2002 when compared to the year-ago quarter:
- North America revenue was $77.9 million compared to $66.9 million, up 16
percent.
- Europe revenue was $22.8 million compared to $16.9 million, up 35 percent.
- Asia revenue was $7.0 million compared to $3.1 million, up 126 percent.
'We are pleased with our financial performance during the third quarter,' said
Kevin Rauckman, chief financial officer of Garmin Ltd. 'Our consumer segment has
now achieved four consecutive quarters of year-over-year revenue growth in
excess of twenty percent. Excluding positive foreign currency effects, we were
able to exceed the high-end of our guidance range of $0.25 for the quarter.
Gross margins held steady at 54.8 percent when compared to 54.9 in the prior
year's third quarter. We also generated $43.3 million of free cash flow for the
quarter resulting in a cash and marketable securities balance of $423 million at
the end of the third quarter.'
Revenue for the nine-month year-to-date period ending September 28, 2002 was
$331.5 million - up 20 percent from the $276.1 million generated in the year-ago
period. Net income increased to $97.3 million, or $0.90 diluted earnings per
share, compared to $85.4 million or $0.79 diluted earnings per share in the
year-ago period. On a year-to-date basis, foreign currency fluctuations have
been immaterial to the EPS calculation.
Consumer revenue for the year-to-date period totaled $248.8 million - a 28.5
percent growth compared to the year-ago period. Aviation revenue totaled $82.7
million - a 0.2 percent increase compared to the year-ago period. Total units
sold for the period increased to 1,079,000 from 993,000 - representing an
increase of 8.7 percent.
Revenue increased across all geographic regions during the first nine months of
the year when compared to 2001:
- North America revenue was $239.3 million compared to $207.8 million, up 15
percent.
- Europe revenue was $76 million compared to $58.4 million, up 30 percent.
- Asia revenue was $16.1 million compared to $9.8 million, up 64 percent.
Revised Fourth Quarter and Fiscal Year 2002 Outlook
Due to increasing interest in GPS navigation technology and demand for Garmin
products, the company is revising previous guidance upward.
The company estimates that its diluted EPS for the fourth fiscal quarter of
2002, excluding effects for foreign currency, will be in the range of $0.25 to
$0.28 on revenues between $106.0 million to $110.0 million.
The company has revised its fiscal year 2002 guidance upward and now estimates
that its diluted EPS for the year, excluding effects of foreign currency, will
be in the range of $1.16 to $1.18 (earlier guidance was $1.07 to $1.14) on
revenues between $437.0 million to $441.0 million (earlier guidance was $415.0
million to $430.0 million).
Earnings Call Information
The information for Garmin Ltd.'s earnings call is as follows:
When: Wednesday, October 30, 2002 at 11:00 a.m. Eastern
Where: www.garmin.com
How: Simply log on to the web at the address above or call to
listen in at 866-783-5359.
Contact: investor.relations@garmin.com
A phone recording will be available for 24 hours following the earnings call and
can be accessed by dialing 800-252-6030 utilizing the access code 13935132. An
archive of the live webcast will be available until November 30, 2002 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 future
financial position, revenues, earnings, product introductions, 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. Information
concerning risk factors that could affect Garmin's actual results is contained
in the Annual Report on Form 10-K for the year ended December 29, 2001 filed by
Garmin with the Securities and Exchange Commission (Commission file number
0-31983). A copy of Garmin's 2001 Form 10-K can be downloaded from
www.garmin.com/aboutGarmin/invRelations/finReports.html.
Through its operating subsidiaries, Garmin Ltd. designs, manufactures, and
markets navigation, communications and information devices, most of which are
enabled by GPS technology. Garmin is a leader in the general aviation and
consumer markets and its products serve aviation, marine, general recreation,
automotive, wireless and OEM applications. Garmin Ltd. is incorporated in the
Cayman Islands, and its principal subsidiaries are located in the United States,
Taiwan and United Kingdom. For more information, visit the investor relations
site of Garmin Ltd. at www.garmin.com or contact the Investor Relations
department at 913-397-8200.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share information)
13-Weeks Ended 39-Weeks Ended
------------------------------- -------------------------------
(Unaudited) (Unaudited)
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2002 2001 2002 2001
------------------------------- -------------------------------
Net sales $107,756 $86,930 $331,450 $276,098
Cost of goods sold 48,705 39,201 150,245 127,401
-------------- -------------- -------------- -------------
Gross profit 59,051 47,729 181,205 148,697
Selling, general and
administrative expenses 11,055 9,663 33,393 28,723
Research and development
expense 7,954 7,306 23,403 20,367
-------------- -------------- -------------- -------------
19,009 16,969 56,795 49,090
-------------- -------------- -------------- -------------
Operating income 40,042 30,760 124,409 99,607
Other income (A) 10,722 2,742 3,813 14,862
-------------- -------------- -------------- -------------
Income before income taxes 50,764 33,502 128,222 114,469
Income tax provision 12,336 8,501 30,887 29,066
-------------- -------------- -------------- -------------
Net income $38,428 $25,001 $97,335 $85,403
============== ============== ============== =============
Net income per share:
Basic $0.36 $0.23 $0.90 $0.79
Diluted $0.36 $0.23 $0.90 $0.79
Weighted average common
shares outstanding:
Basic 107,798 108,242 107,788 108,242
Diluted 108,139 108,599 108,193 108,621
(A) Includes $9.6 million of foreign currency gains in Q3 2002 and $.3 million
of gains in Q3 2001. Includes $.2 million of foreign currency losses for
the nine-month period ended September 28, 2002 and $7.7 million of gains
for the nine-month period ended September 29, 2001.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
Sept. 28, December 29,
2002 2001
Assets
Current assets:
Cash and cash equivalents $194,444 $192,842
Marketable securities 77,555 40,835
Accounts receivable, net 44,916 47,998
Inventories 50,109 61,132
Deferred income taxes 6,963 7,007
Prepaid expenses and other current assets 5,135 2,921
Total current assets 379,122 352,735
Property and equipment, net 71,644 70,086
Restricted cash 1,458 1,600
Marketable securities 151,020 90,749
Other assets, net 25,594 16,985
Total assets $628,838 $532,155
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $22,069 $18,837
Salaries and benefits payable 3,994 3,308
Warranty reserve 3,802 4,777
Income taxes payable 7,490 12,444
Current portion of long-term debt 1,334 4,177
Other accrued expenses 9,409 5,485
Total current liabilities 48,098 49,028
Long-term debt 18,666 28,011
Deferred income taxes 1,075 1,147
Stockholders' equity:
Common stock 1,078 1,078
Additional paid-in capital 127,349 127,131
Retained earnings 462,422 365,087
Accumulated other comprehensive loss (29,849) (39,327)
Total stockholders' equity 560,999 453,969
Total liabilities and stockholders' equity $628,838 $532,155