Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (USD $) | ||
In Thousands | Jun. 27, 2009
| Dec. 27, 2008
|
Current assets: | ||
Cash and cash equivalents | $958,909 | $696,335 |
Marketable securities | 18,889 | 12,886 |
Accounts receivable, net | 519,433 | 741,321 |
Inventories, net | 323,161 | 425,312 |
Deferred income taxes | 59,331 | 49,825 |
Prepaid expenses and other current assets | 65,081 | 58,746 |
Total current assets | 1,944,804 | 1,984,425 |
Property and equipment, net | 443,026 | 445,252 |
Marketable securities | 524,935 | 262,009 |
Restricted cash | 2,066 | 1,941 |
Licensing agreements, net | 20,647 | 16,013 |
Other intangible assets, net | 208,888 | 214,941 |
Total assets | 3,144,366 | 2,924,581 |
Current liabilities: | ||
Accounts payable | 137,360 | 160,094 |
Salaries and benefits payable | 28,396 | 34,241 |
Accrued warranty costs | 79,968 | 87,408 |
Accrued sales program costs | 69,554 | 90,337 |
Other accrued expenses | 94,118 | 87,021 |
Income taxes payable | 20,142 | 20,075 |
Total current liabilities | 429,538 | 479,176 |
Deferred income taxes | 14,514 | 4,070 |
Non-current taxes | 236,927 | 214,366 |
Other liabilities | 1,231 | 1,115 |
Stockholders' equity: | ||
Common stock, $0.005 par value, 1,000,000,000 shares authorized: Issued and outstanding shares - 200,505,000 as of June 27, 2009 and 200,363,000 as of December 27, 2008 | 1,000 | 1,002 |
Additional paid-in capital | 23,264 | 0 |
Retained earnings | 2,472,912 | 2,262,503 |
Accumulated other comprehensive gain/(loss) | (35,020) | (37,651) |
Total stockholders' equity | 2,462,156 | 2,225,854 |
Total liabilities and stockholders' equity | $3,144,366 | $2,924,581 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets [Parenthetical] (USD $) | ||
Jun. 27, 2009
| Dec. 27, 2008
| |
Condensed Consolidated Balance Sheets [Parenthetical] | ||
Common Stock, Par or Stated Value Per Share | 0.005 | 0.005 |
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Common Stock, Shares, Issued | 200,505,000 | 200,363,000 |
Common Stock, Shares, Outstanding | 200,505,000 | 200,363,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (USD $) | ||||
In Thousands, except Per Share data | 3 Months Ended
Jun. 27, 2009 | 3 Months Ended
Jun. 28, 2008 | 6 Months Ended
Jun. 27, 2009 | 6 Months Ended
Jun. 28, 2008 |
Net sales | $669,104 | $911,671 | $1,105,803 | $1,575,476 |
Cost of goods sold | 317,490 | 494,543 | 558,194 | 838,233 |
Gross profit | 351,614 | 417,128 | 547,609 | 737,243 |
Advertising expense | 34,023 | 58,327 | 57,248 | 96,456 |
Selling, general and administrative expense | 62,186 | 66,701 | 121,963 | 126,397 |
Research and development expense | 56,253 | 53,597 | 111,287 | 103,154 |
Total operating expense | 152,462 | 178,625 | 290,498 | 326,007 |
Operating income | 199,152 | 238,503 | 257,111 | 411,236 |
Interest income | 5,190 | 9,801 | 10,286 | 18,127 |
Foreign currency | (4,836) | 21,561 | (7,274) | 17,562 |
Gain on sale of equity securities | 0 | 45,686 | 0 | 50,949 |
Other | 335 | 612 | (359) | 732 |
Total other income | 689 | 77,660 | 2,653 | 87,370 |
Income before income taxes | 199,841 | 316,163 | 259,764 | 498,606 |
Income tax provision | 37,970 | 60,071 | 49,355 | 94,735 |
Net income | $161,871 | $256,092 | $210,409 | $403,871 |
Net income per share: | ||||
Basic | 0.81 | 1.2 | 1.05 | 1.88 |
Diluted | 0.81 | 1.19 | 1.05 | 1.86 |
Weighted average common shares outstanding: | ||||
Basic | 200,296 | 213,756 | 200,364 | 215,130 |
Diluted | 200,853 | 215,572 | 200,814 | 217,274 |
2_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (USD $) | ||
In Thousands | 6 Months Ended
Jun. 27, 2009 | 6 Months Ended
Jun. 28, 2008 |
Operating Activities: | ||
Net income | $210,409 | $403,871 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 26,335 | 18,690 |
Amortization | 15,914 | 8,430 |
Gain on sale of property and equipment | (108) | (208) |
Provision for doubtful accounts | (5,223) | 3,977 |
Deferred income taxes | (718) | 17,342 |
Foreign currency transaction gains/losses | (4,493) | 25,428 |
Provision for obsolete and slow moving inventories | 14,111 | 28,326 |
Stock compensation expense | 21,029 | 18,253 |
Realized gains on marketable securities | (1,274) | (72,445) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 233,166 | 307,580 |
Inventories | 89,044 | (141,180) |
Other current assets | (2,415) | 8,110 |
Accounts payable | (23,175) | (213,507) |
Other current and non-current liabilities | (4,838) | (102,909) |
Income taxes payable | (5,140) | (25,341) |
Purchase of licenses | (6,936) | (4,236) |
Net cash provided by operating activities | 555,688 | 280,181 |
Investing activities: | ||
Purchases of property and equipment | (23,343) | (79,917) |
Proceeds from sale of property and equipment | (7) | 8 |
Purchase of intangible assets | (3,496) | (997) |
Purchase of marketable securities | (341,423) | (344,119) |
Redemption of marketable securities | 68,173 | 390,179 |
Change in restricted cash | (125) | 14 |
Acquisitions, net of cash acquired | 0 | (34,768) |
Net cash used in investing activities | (300,221) | (69,600) |
Financing activities: | ||
Proceeds from issuance of common stock from exercise of stock options | 310 | 2,050 |
Proceeds from issuance of common stock from stock purchase plan | 3,712 | 5,144 |
Stock repurchase | (1,849) | (318,471) |
Tax benefit related to stock option exercise | 65 | 1,965 |
Net cash used in financing activities | 2,238 | (309,312) |
Effect of exchange rate changes on cash and cash equivalents | 4,869 | 15,524 |
Net increase / (decrease) in cash and cash equivalents | 262,574 | (83,207) |
Cash and cash equivalents at beginning of period | 696,335 | 707,689 |
Cash and cash equivalents at end of period | $958,909 | $624,482 |
Basis of Presentation
Basis of Presentation | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.Operating results for the 13-week and 26-week periods ended June 27, 2009 are not necessarily indicative of the results that may be expected for the year ending December 26, 2009. The condensed consolidated balance sheet at December 27, 2008 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.For further information, refer to the consolidated financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the year ended December 27, 2008. The Companys fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year.Therefore the financial results of certain fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13-weeks.The quarters ended June 27, 2009 and June 28, 2008 both contain operating results for 13-weeks for both year-to-date periods. |
Inventories
Inventories | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Inventories [Abstract] | |
Inventories | 2. Inventories The components of inventories consist of the following: June 27, 2009 December 27, 2008 Raw Materials $ 97,118 $ 151,132 Work-in-process 37,819 28,759 Finished goods 216,304 268,625 Inventory Reserves (28,080 ) (23,204 ) Inventory, net of reserves $ 323,161 $ 425,312 |
Share Repurchase Plan
Share Repurchase Plan | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Share Repurchase Plan [Abstract] | |
Share Repurchase Plan | 3. Share Repurchase Plan The Board of Directors approved a share repurchase program on October 22, 2008, authorizing the Company to purchase up to $300,000 of its common shares as market and business conditions warrant.The share repurchase authorization expires on December 31, 2009.As of June 27, 2009, the Company had repurchased 117,600 shares using cash of $1,849 with all purchases made in the first quarter.There remains approximately $256,000 available for repurchase under this authorization given the $42,000 of purchases in fiscal 2008. |
Earnings Per Share
Earnings Per Share | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Earnings Per Share [Abstract] (EarningsPerShareAbstractDisclosure) | |
Earnings Per Share | 4. Earnings Per Share The following table sets forth the computation of basic and diluted net income per share: 13-WeeksEnded June27, June28, 2009 2008 Numerator: Numerator for basic and diluted net incomeper share - net income $ 161,871 $ 256,092 Denominator: Denominator for basic net income per share weighted-average common shares 200,296 213,756 Effect of dilutive securities employee stock options 557 1,816 Denominator for diluted net income per share adjusted weighted-average common shares 200,853 215,572 Basic net income per share $ 0.81 $ 1.20 Diluted net income per share $ 0.81 $ 1.19 26-Weeks Ended June 27, June 28, 2009 2008 Numerator: Numerator for basic and diluted net incomeper share - net income $ 210,409 $ 403,871 Denominator: Denominator for basic net income per share weighted-average common shares 200,364 215,130 Effect of dilutive securities employee stock options 450 2,144 Denominator for diluted net income per share adjusted weighted-average common shares 200,814 217,274 Basic net income per share $ 1.05 $ 1.88 Diluted net income per share $ 1.05 $ 1.86 There were 7,948,978 anti-dilutive options for the 13-week period ended June 27, 2009.There were 5,408,834 anti-dilutive options for the 13-week period ended June 28, 2008. There were 8,548,181 anti-dilutive options for the 26-week period ended June 27, 2009.There were 5,049,164 anti-dilutive options for the 26-week period ended June 28, 2008. There were 12,622 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended June 27, 2009. There were 24,720 shares issued as a result of exercises of stock appreciation rights and stock options for the 26-week period ended June 27, 2009. |
Comprehensive Income
Comprehensive Income | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Comprehensive Income [Abstract] | |
Comprehensive Income | 5. Comprehensive Income Comprehensive income is comprised of the following: 13-WeeksEnded June27, June28, 2009 2008 Net income $ 161,871 $ 256,092 Translation adjustment 26,236 (18,790 ) Change in fair value of available-for-sale marketable securities, net of deferred taxes 1,199 (24,291 ) Comprehensive income $ 189,306 $ 213,011 26-Weeks Ended June 27, June 28, 2009 2008 Net income $ 210,409 $ 403,871 Translation adjustment 7,473 61,004 Change in fair value of available-for-sale marketable securities, net of deferred taxes (4,842 ) (57,265 ) Comprehensive income $ 213,040 $ 407,610 |
Segment Information
Segment Information | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Segment Information [Abstract] | |
Segment Information | 6. Segment Information Net sales, operating income, and income before taxes for each of the Companys reportable segments are presented below: Reportable Segments Outdoor/ Auto/ Fitness Marine Mobile Aviation Total 13-Weeks Ended June 27, 2009 Net sales $ 108,009 $ 60,198 $ 436,718 $ 64,179 $ 669,104 Operating income $ 50,416 $ 21,342 $ 106,712 $ 20,682 $ 199,152 Income before taxes $ 51,255 $ 21,722 $ 105,474 $ 21,390 $ 199,841 13-Weeks Ended June 28, 2008 Net sales $ 119,147 $ 71,178 $ 631,883 $ 89,463 $ 911,671 Operating income $ 45,445 $ 24,068 $ 129,190 $ 39,800 $ 238,503 Income before taxes $ 55,302 $ 27,905 $ 191,855 $ 41,101 $ 316,163 26-Weeks Ended June 27, 2009 Net sales $ 188,013 $ 98,215 $ 696,304 $ 123,271 $ 1,105,803 Operating income $ 78,920 $ 31,914 $ 111,318 $ 34,959 $ 257,111 Income before taxes $ 78,915 $ 31,444 $ 114,632 $ 34,773 $ 259,764 26-Weeks Ended June 28, 2008 Net sales $ 189,641 $ 127,185 $ 1,083,742 $ 174,908 $ 1,575,476 Operating income $ 64,756 $ 41,904 $ 236,831 $ 67,745 $ 411,236 Income before taxes $ 75,749 $ 47,238 $ 304,159 $ 71,460 $ 498,606 Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis. Net sales and property and equipment, net by geographic area are as follows as of and for the 26-week periods ended June 27, 2009 and June 28, 2008: Americas Asia Europe Total |
Warranty Reserves
Warranty Reserves | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Warranty Reserves [Abstract] | |
Warranty Reserves | 7. Warranty Reserves The Companys products sold are generally covered by a warranty for periods ranging from one to two years.The Companys estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet.The following reconciliation provides an illustration of changes in the aggregate warranty reserve. 13-WeeksEnded June27, June28, 2009 2008 Balance - beginning of the period $ 68,847 $ 72,751 Accrual for products soldduring the period 31,106 37,666 Expenditures (19,985 ) (26,498 ) Balance - end of the period $ 79,968 $ 83,919 26-Weeks Ended June 27, June 28, 2009 2008 Balance - beginning of the period $ 87,408 $ 71,636 Accrual for products soldduring the period 49,621 72,987 Expenditures (57,061 ) (60,704 ) Balance - end of the period $ 79,968 $ 83,919 |
Commitments
Commitments | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Commitments [Abstract] | |
Commitments | 8. Commitments We are a party to certain commitments, which includes raw materials, advertising and other indirect purchases in connection with conducting out business.Pursuant to these agreements, the Company is contractually committed to make purchases of approximately $37,200 over the next 5 years. |
Income Taxes
Income Taxes | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | 9.Income Taxes Our earnings before taxes decreased 36.8% when compared to the same quarter in 2008, and our income tax expense decreased by $22,101, to $37,970, for the 13-week period ended June 27, 2009, from $60,071 for the 13-week period ended June 28, 2008, due to our earnings before taxes decline. The effective tax rate was 19.0% for both the 13-weeks and 26-weeks ended June 27, 2009 and the 13-weeks and 26-weeks ended June 28, 2008.We have experienced a relatively low effective corporate tax rate due to the proportion of our revenue generated by entities in tax jurisdictions with low statutory rates.In particular,the profit entitlement afforded our parent company based on its intellectual property rights ownership of our consumer products along with substantial tax incentives offered by the Taiwanese government on certain high-technology capital investments have continued to generate a relatively low tax rate. |
Fair Value Measurements
Fair Value Measurements | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 10.Fair Value Measurements In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements. The Company adopted SFAS No.157 effective December 30, 2007. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).SFAS No. 157 classifies the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liability Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or Unadjusted quoted prices for identical or similar assets Level 3 Unobservable inputs for the asset or liability The Company endeavors to utilize the best available information in measuring fair value.Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. For fair value measurements using significant unobservable inputs, an independent third party provided the valuation.The inputs used in the valuations used the following methodology.The collateral composition was used to estimate Weighted Average Life based on historical and projected payment information.Cash flows were projected for the issuing trusts, taking into account underlying loan principal, bonds outstanding, and payout formulas.Taking this information into account, assumptions were made as to the yields likely to be required, based upon then current market conditions for comparable or similar term Asset Based Securities as well as other fixed income securities. Assets and liabilities measured at estimated fair value on a recurring basis are summarized below: FairValueMeasurementsas ofJune27,2009 Description Total Level 1 Level 2 Level 3 Available for-sale securites $ 475,995 $ 475,995 - - Failed Auction rate securities 67,829 - - 67,829 Total $ 543,824 $ 475,995 $ - $ 67,829 For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, SFAS No. 157 requires a reconciliation of the beginning and ending balances, separately for each major category of assets.The reconciliation is as follows: FairValueMeasurementsUsing SignificantUnobservableInputs(Level3) 13-WeeksEnded 26-WeeksEnded |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Recently Issued Accounting Pronouncements [Abstract] | |
Recently Issued Accounting Pronouncements | 11.Recently Issued Accounting Pronouncements In May 2008, the FASB issued EITF 07-1, Accounting for Collaborative Arrangements. EITF Issue 07-1 requires entities entering into collaborative arrangements in which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards that depend on the commercial success of the joint operating activity to make specific disclosures regarding that arrangement. Garmin announced a strategic alliance with ASUSTeK Computer Inc. on February 4, 2009 that will leverage the companies navigation and mobile telephony expertise to design, manufacture and distribute co-branded location-centric mobile phones. The mobile phone product line will be known as the Garmin-Asus nvifone series. The Company has adopted EITF Issue 07-1 and the strategic alliance did not have a material impact on the Companys financial condition or operating results in the second quarter of 2009. In January 2009, the FASB released Proposed Staff Position SFAS 107-b and Accounting Principles Board (APB) Opinion No. 28-a, Interim Disclosures about Fair Value of Financial Instruments (SFAS 107-b and APB 28-a).This proposal amends FASB Statement No. 107, Disclosures about Fair Values of Financial Instruments, to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements.The proposal also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in all interim financial statements.This proposal is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009.The Company has adopted SFAS 107-b and APB 28-a and the guidance did not have a material impact on the Companys financial condition or operating results in the second quarter of 2009. In April 2009, the FASB issued FSP No. FAS 157-4 (FSP FAS 157-4), Determining Fair Value When the Volume and Level of Activity for the Asset or Liability has Significantly Decreased and Identifying Transactions That Are Not Orderly and FSP No. FAS 115-2 and FAS 124-2 (FSP FAS 115-2), Recognition and Presentation of Other-Than-Temporary Impairments.These two FSPs were issued to provide additional guidance about (1) measuring the fair value of financial instruments when the markets become inactive and quoted prices may reflect distressed transactions, and (2) recording impairment charges on investments in debt instruments.Additionally, the FASB issued FSP No. FAS 107-1 and APB 28-1 (FSP FAS 107-1), Interim Disclosures about Fair Value of Financial Instruments, to require disclosures of fair value of certain financial instruments in interim financial statements.The adoption of these FSPs did not materially impact the Company.These FSPs are effective for financial statements issued for interim and annual reporting periods ending after June 15, 2009.The Company has adopted FSP FAS 157-4 and the guidance did not have a material impact on the Companys financial condition or operating results in the second quarter of 2009. In May 2009, the FASB issued SFAS No. 1 |
Subsequent Events
Subsequent Events | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Subsequent Events [Abstract] | |
Subsequent Events | 12.Subsequent Events On July 30, 2009, the Companys Board of Directors approved an annual cash dividend of $0.75 per share.The dividend is payable to shareholders of record on December 1, 2009 and will be paid on December 15, 2009.The Company estimates the liability to be approximately $150,000 based on the current shares outstanding. The Company evaluated subsequent events through the time of filing this Quarterly Report on Form 10-Q on August 5, 2009. |
Document Information
Document Information | |
6 Months Ended
Jun. 27, 2009 USD / shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Amendment Description | n/a |
Document Period End Date | 2009-06-27 |
Entity Information
Entity Information (USD $) | |||
6 Months Ended
Jun. 27, 2009 | Jul. 31, 2009
| Jun. 28, 2008
| |
Entity Information [Line Items] | |||
Entity Registrant Name | Garmin Ltd. | ||
Entity Central Index Key | 0001121788 | ||
Current Fiscal Year End Date | --12-26 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $6,026,179,129 | ||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 200,512,323 |