GRMN - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen. And welcome to the Garmin’s Fourth Quarter 2017 Earnings Call. At this time, all participants are in a listen only mode. Later we will conduct the question-and-answer Session and instructions to be given at that time [Operator Instructions].

As a reminder, this call is being recorded. to call like Seck. to now would turn over the Teri I

may You begin.

Teri Seck

would This and you earnings www.garmin.com/stock. the statements plans earnings results and in differ a also business. discussed The objectives and will statements. factors XX-K Information actual the call market to is fourth occur, morning. on projections related of in and available like Good forward-looking demand factors Web We transcript Relations Investor and and Exchange Treasurer. welcome as of our could and and filed slides be I earnings products site contained the forward-looking future like available circumstances and and Commission. Cliff our events to forward-looking Chief to Boessen, Limited the on Officer on Form future Please for introductions, Officer Garmin at Limited concerning behalf Securities time, and these and this revenues, Pemble, are morning and Garmin's release regarding Executive Internet risk the call regarding statements materially affecting risk not Garmin. with may Doug Financial site. quarter call. Garmin this position, call to over Chief President At earnings, its of this are and Cliff Presenting turn our would archive note Any other dividend, press that financial at earnings operating product our includes the future related shares, are growth An margins, XXXX Limited's Garmin webcast Pemble. result

Cliff Pemble

Thanks, Teri, and morning, good everyone.

income XX% revenue of basis. our today, profit revenue the earlier and X% Revenue quarter. outdoor, and fitness marine holiday in we As and Combined aviation, on represented growth. margin X%, revenue increased a we Gross EPS another $X.XX growth due of GAAP $X.XX improved to grew delivered quarter results consolidated from strong announced XX%, of in quarter. operating generated to pro the both margin XX%. Operating EPS favorable to of and forma resulting in product year-over-year mix. an These shifts XX% of improved segment and

was this the our Looking revenue believe PND remarkable year briefly second achievement is I and nearly performance, decline consecutive that of for a income market decade. operating our we faced. growth. a as considering at is year its challenges continued it The done full XXXX

more $X.XX. outdoor, of XXXX and basis market XX% increased strength and matured the income We operating $X.X left addition, fill. Combined $X.XX of forma discuss financial to X% EPS GAAP greater that in EPS EPS forma resulted Global were results This highlight Doug employers of but will that XXXth out In while XX% to aviation, Revenue rapidly was the over grew from and fitness companies X%. improved XX% than more additional list, to activity our I included detail Forbes income. generated Pro marine our pro because respectively a X% operating nearly over and and revenue X% grew few the operating of placing in diversity tracker filled world's these in increased surveyed. gaps business. of prior in to billion. and want the our and in best minutes, gaps of first, margins recently XXX,XXX Growth XXXX Garmin year.

producing leadership and well, treating customers commitment considered Americas metrics, Company’s diverse including corporate focus quality We treating to best goods, minimizing XXst environmental supporting impact, communities on we the seven citizens This workers Just also well. and ranked our ethical list. XXX operate were Forbes the in in, ranking

values to for which mission We are possible. and our your recognition strong this all honored this thank of to employees by made want I recognition commitment and our

Outdoor in revenue increased respectively, and income operating wearables and margins five and resulting The segments. demand for in Next XX% subscription and the growth Starting of each outlook on for year. XX% performance Outdoor, XXXX of inReach operating gross our XXXX of with segment growth I’ll strong services. highlight prior over posted XX% XX%

of was driven that registering series. X our In underrepresented in There to Looking say of by demographic I’d watches show fēnix fēnix back is the positive a we strong successfully highlight X base. about momentum, the our product fēnix fēnix styles women, customer new offered customer adventure fēnix line, line XS majority the are that has our base. variety devices to of customers the in sizes and continued things particular, this like family but on are broadened one which XXXX, previously can many

become mid and have than mentioned IQ more of X,XXX has power IQ past, the Connect the our apps, developers’ leverage and which in for differentiator our occurred year. we use faces, in As an at further April, will can in our approximately smart we that and since workshops watch past wearable annual over offering and utility promote now XX tools widgets conference half inception, host developers downloads offers has the important Connect application million platform the to ecosystem. Garmin generated IQ, our second To Connect wearables.

series anticipate Looking Outdoor in XX% other increase and categories segment supported in ahead, within in will approximately will the driven by anticipate XXXX. the the primarily we the product by be growth segment. We revenue fēnix growth

will Sky system. respectively, of and XX% recent with that Courier equipped growth operating year. our in $XXX the solid million revenues exceeding reported XX% in at time the In developments, strong revenue and were aircraft growth operating was Garmin new growth announced aftermarket margins We categories. income aviation. both product to in for OEM Textron XX% GXXXXNXI first broad Aviation be Growth with XX% next resulting in history, Turning the for of the based Cessna

as pressure to and We States’ on U-X alerts such United benefits, look Charlie delivery the aircraft. aircraft. and by Aviation information use wrist. that pilots The the glanceable are provide by for and will Watch announced navigation our of forward Charlie Force our unique selected with Aviation DX Air the this we expand Lockheed was Textron supporting certification week, Last partnership the to excited new of DX

Our to aviation quality strong service has team and customers. a delivering our to commitment

on the Awards The This technical way meet. Embraer’s Aviation our year, fourteenth the recent Avionic our pilot operators these electronic Garmin in magazine received I consecutive of Embraer associates by congratulate Also Year international and Garmin As to which for care for accomplishment that and the ranked a quality for the and is professional amazing Supplier scope XXXX suppliers number one Suppliers the a team the two to was is testament awards, and equipment conference. for evidence high significant of and operations by customers. support earning at systems news. our must electric complexity of that commitment, support of considering we and expectations their

XXXX. to revenue ahead, aftermarket from new products mandate. related and We anticipate broad-based Looking opportunities both we OEM approximately and XX% anticipate increase aviation will categories and segment in growth conditions, product platforms due to the across in improving contributions the market ADS-B

electronics costs. saltwater the United next Gross Marine XX%, Company, that is Hunt offering the in operating Boat At Garmin due contributions line improved their declined brands selling Looking boat watercraft. Sea and driven margin Navionics Show, Miami to the to States, from chartplotters, of we recent grew XX% the segment, in top at while in acquisition. one now related of revenue our by growth fishfinders margin announced litigation XX% Boat

serve Hunt opportunity to and We are customers. excited Sea their the by

broad anticipate technologies. a in We segment of well consisting XXXX and XX%, the revenue as portfolio approximately organic will entering with strong We recent of growth are growth from acquisition. products both our marine as increase Navionics

by line basic activity activity of market Gross for fitness, Gross improved X%, we targeting and the by margin the driven operating XX% year. to trackers, fitness in revenue XX% variables to activity revenue In trackers. margin declined by and maturing offset the declines rapidly further basic children's next in operating as advance XXXX, Turning our trackers mix due variables, product advanced was segment are growth in be and from to is children's while margins in it cycling growth and prior declined partially flat respectively. trackers. offset

as market. were in full XX% due the to Auto for segment, the down at finally revenues decline the PND Looking the ongoing year expected

very Gross market and margins global and share remains X% XX% our However, operating respectively. strong. were

downward RV the categories, understood, product opportunities certain While market of we see trend trucking, well PND consumer cameras. is in the and including growth incremental

profits focused while segment We on in this leveraging these opportunities. maximizing are

opportunities and by execution in to disciplined XXXX, XXXX in year-over-year to approximately strong ahead. With market we revenue line approximately revenue at expect product in the on the in with mind, we decline up the pragmatic is many ongoing partially segment. X% in this offset are of marine outdoor, aviation, by billion, profitability and as see $X.X to we we decline growth ongoing the projecting focused declines Auto driven innovation the summary, a segment. up XX%, are Looking bring We remain market. maximize entering In to PND

of of approximately pro approximately projecting XX.X%, That margin XX%, year forma improved gross share tax are XX% full margin and per remarks. rate resulting concludes forma approximately pro $X.XX. of earnings approximately We my in of operating effective

walk through Doug financial Next, you Doug? details on additional will our results.

Doug Boessen

$XXX with basis fourth Good We a margin to point year the segment expense from XX%, year. on full year XXX begin our by recognition XX.X%, of X% and is prior impacts product Gross increase million Thanks, To XX.X%, posted revenue income I'll point the driven quarter, from new percentage over $XXX was was mix. quarter prior by year. prior statement, cash revenue comments reviewing representing million, increase sheet, results. XX% from the and Cliff. the balance Operating increase as XXX standard. basis the was move everyone. consistent financial morning, Operating Operating the prior increase flow sales for margin year. fourth taxes year-over-year.

Our our forma GAAP pro EPS was was $X.XX. $X.XX EPS and

XXX $X.X in XX.X%, year, the over income basis the basis sales posted at prior prior Gross XXX Operating was We increase revenue from increase as year. was XX.X%, prior $XXX results. the year percentage Looking basis year. gross Margin of increase representing the margin increase prior Operating XXX year. margin. X% over by of billion a for XX.X%, the from Operating X% year-over-year. point expense a year, was percent increase about the point of increase a full million, driven points was

EPS EPS forma GAAP $X.XX was pro Our $X.XX. was

Next revenue the to segment. by look year and at full quarter fourth

the led growth segment with fourth During XX%, Marine digit segments, by our quarter, three quarter. double returned growth the achieved fourth five of in in the fitness we to

robust by solid X% and the led our growth segments. achieved digit growth in For consolidated year XXXX, double segment outdoor Marine Aviation our and growth full in we

total income. the Fitness Outdoor, next Outdoor and XX% grew fourth XX% XX%. prior XXXX segments contributed and quarter. from Aviation, compared to to revenue Marine Looking Collectively, year quarter revenue XX% fourth quarter operating to

income Fitness profit to compared increased XXXX from income XX% XX% delivered Just given operating and as the chart operating mix percentage it XX%. Outdoor, quarter the fourth to of fourth illustrates by Aviation, Outdoor quarter XX% income segment, of collectively segments our Marine a operating total XXXX.

Looking next charts. year full to the

Aviation, XXXX income occurred XX% For XX% made Marine the year, and compared the segments the Marine in to XX% full in operating in with Seamless Aviation, of Outdoor, XXXX. our segments operating Fitness XX% up revenue total of to collectively Outdoor, income Fitness compared coming from and shift XXXX.

the operating engineering increased expenses. to million by of by or offset as Fourth XXXX. and next of Research operating acquisition, the expense additional $X investments a in million Navionics flat in percent year-over-year week quarter development Looking increased resources basically and sales. partially expenses $X to due

of We X.X% XXX decreased basis $XXX cash increase Our to decrease. was balance the advertising statement. segment. to media $X.X marketable to sales up and lower cash quarter, stronger was expense highlights primarily the compared to we so with million sequentially raw exit $XXX sequentially Decrease balance material points flow of million million timing costs as represented increased Accounts sheet primarily due $XX seasonally and acquisition. million holiday year to quarter to strong of to prior and year-over-year, sales Few percent due the fitness ended Navionics quarter receipts. and year-over-year XX.X%. quarter related due fourth approximately point requirements. Inventory billion. was to securities to a due This primarily the quarter increased basis of cash SG&A from increased receivable litigation sales $X to in XXX increase spend due decreased prior the to

During $X.XX payment. of $X.XX the we at quarterly of fourth cash flow million. XXXX, per for per shareholder announced share, per with from $XX a Also free an that dividends to approval $XXX dividend increased million. to during XXXX quarter We take beginning of the we plan paid quarter, June we approximately generated dividend increase $X.XX per X% current share cash share. dividend quarter, Proposal

tax tax net million $XXX year accounts pro forma change share balance new benefit items sheet discreet million, partially $XXX the related tax a as XXXX, in of of standard For by the accounting resulting we corporate income full relating tax to offset from based expiration result expense, related to reported an of to benefit of $XX tax million selection, which awards. Switzerland $XX million of includes the a

tax Excluding full due XX.X% certain was the the rate year involving tax election pro Company's the primarily to increase XX.X% tax pro to initiatives. forma XXXX positions in effective align prior effective year. tax items, discreet international the The Switzerland was compared forma pro in rate tax to forma

expect our approximately reform. forma full to year due U.S. effective XX%, We XXXX primarily tax for be decrease rate pro is tax to

increase the XXXX Finally, only have for from it standard. our restated to in new line deferred our by calculated recognition the remarks. earnings new is We All XXXX we the which state recognition statements adopted through quarter please revenue Auto an amounts can the Michelle, in prior new open less impacted Impact the revenue The in revenue to of revenue XXXX I would revenue This standard. formal have is impact all financial the financials. you completes the means appendix walk you new segment standard. $XX to were release. the XXXX to is guidance available million, of standard Q&A? segment first for

Operator

question [Operator from Dougherty Markets. Anderson first comes Our Instructions] of Charlie

Charlie Anderson

to little sentiment. part want of think better a two with getting So peers kind start your I environment you of similar mentioned I question. aviation expressed a some have Cliff, bit a

of it of follow-up XXXX on the wonder from So I upgrades? peak for or a you I view to that for the if feel terms in you’re upgrades, what that XXXX seeing, terms And the then it is relates outlook market. just I've Marine? sustainable as then contribution ADS-B wonder you those guys got And year in as

Cliff Pemble

think I incrementally of In seeing environment, that the aviation all better. it's terms we're

in somewhat low very and numbers are that. think very Of But by encouraged the course a we’re the in growth. coming I bottom of most overall off terms are smaller the industry

of terms things good In future. its for I sustainability, look think the foreseeable

me to downturn. that these commented though bump aviation, of are recently marine from economic Somebody some markets one away like

feel have due we So But in they recognize their general, somewhat good that nature. to that. we are fragile about to

would In terms year, of be going acceleration see ADS-B year would the unit peak in and which deliveries we forward. certainly

days even number have still it's get would about than than I think I half. been equipped would be far aircraft, and people anticipate retrofitting on the XXXX of that is bigger so XXXX their that probably serious but as the aircrafts somewhat less early still low side,

we're people So forward. more waiting to step see

Charlie Anderson

relates benefit it much as I marine, in how how then got anticipates, XX% wonder And the of portion? the and growth QX then guys to inorganic you much acquisition from

Doug Boessen

we the half So from expecting about of XXXX Charlie, to guidance related to Navionics. we’re gave, come that basically

Operator

from comes Doug of Our Goldman next Sachs. question Clark

open. is line Your

Doug Clark

decline. on XXXX guide one auto acceleration an First the segment, the and implies

acceleration after I'm So of wondering what's can driving moderation. if about that like years seems what a you talk few

Doug Boessen

I in much come as did in on fleet same PND on products been the our new which a segment, customers comps what in our Auto some of as our to We seeing not to XXXX major Honda. such the is as think ELD grow because categories terms on part that mandate In that see as have we've the been ELD, is OEM categories. well trajectory some outlook of some before. year-over-year has drove of improvement like expected fast in business So it overall as due of our pretty we're XXXX, board

Doug Clark

it OpEx about then year-on-year. be up using billion other questions, expected OpEx, is looks X% your two so implied or $X.X on like And guidance my first to

question, what FX the quarter was So talk in what I'm can about fourth impact is? FX revenues for the then ’XX to expectation a curious and financial spend? the OpEx And in acceleration you XXXX benefit

Doug Boessen

in strength was additional for the tailwind, lines on manufacturing a then advertising Q$ million OpEx then of additional different adding aviation the it $XX be in revenue of obviously FX Navionics, R&D driven it flat. of relates percent and to increase have that. to some keep XXXX, of relates headcount ’XX XXXX. year some of investments about full business we relating to was and it third And we for expecting it that costs would the as impact as expect FX, a is to that we're our sales, then OpEx of the at related hitting and new also relating looking in tailwind some consumer had about distribution we’re some costs type to we'll Also relates that As X% as facility, for by of really additional primarily Then about have so about $XX acquisition for to euro. million to relatively

Doug Clark

then impact? assuming XXXX, -- any are FX guidance you for And any within your

Doug Boessen

impact bit million think the probably year I in rate. assuming it's it There's to about that the guidance, tailwind higher in because the FX $XX type for is for now euro of the the current average euro guidance, [XXX], of was about probably that's the a quite and

Operator

next comes Longbow Our Joe from question Wittine Research. of

Joe Wittine

on I'll the Do ask roadmap? of guess, you maintain I can so your first outdoor. product expect in prices based XXXX on wearables wearables in off portion your average you here, selling

Cliff Pemble

and fēnix be products, our on be discounting offer we that is us older strong line and helps them allow product such generally volumes. roadmaps So believe able plan. able promote which that's we to as to some sell bring so, the our fēnix more to newer We to have the to in very X products, believe this in and

general, stable. we is ASP in So situation feel like fairly the

Joe Wittine

for I be new on Forerunner available seems vívomove isn’t then still availability limited. ask to and wanted products And XXX then pretty two to HR

that on could new expect in note to somewhat Garmin technology, production be anything is both hands? there those the if we just consumers’ have wondering fact just when So given

Cliff Pemble

some performance. eminent, and final adjustment is our on we're So the features making XXX

coming HR, soon. be which that more should took that the based With was very vívomove of our product on conservative original experience the a view HR. launched the to But product. we've we reception of very by pleasantly the Vivomove, So surprised we been niche as vívomove on a

trying our So we've volumes increase to product well. been and as chasing chain supply that on

about So demand. all not contributor we been supply feel we've able as the pretty that a but to good

Joe Wittine

looking tip the individual of to you finally product of when especially variables, forward same got a cycling won't you just the But XXXX? ahead six of given it very announcements on know top new Then months on here, you introductions lighter fitness, exiting wearables. perhaps in on include active also announcements momentum in new But spring I a number products. expect reasonable is that of topic

Cliff Pemble

I can’t roadmap active really coming and on we comment are have that introductions, so of do very timing new the a XXXX in wearables of beyond.

much product introducing and still we're the line So and very products developing features. new

Operator

question next Stanley. from Yuuji of Our comes Morgan Anderson

Yuuji Anderson

As that there outdoor a the depicted give pack yet better products how be much much on to be launched obviously would attributable of sense can that you outlook us have. how products already versus that are to of you that's

Cliff Pemble

on Well, of segment. the overall contributions terms the certainly we and driver the our comments we contribution in around as the to comment primary I that is the It's details in of grown category in segment. within the product new fēnix But said it's largest such think the growth that. won't product single

Yuuji Anderson

is the towards the the timing to this guidance year? the assume decline and And just would there? scaled going flat throughout of Fitness that Is Fitness year then on more end -- of be the product with Or just recent launches given product the launches. revenue it with

Cliff Pemble

then the wearables the quite advanced tougher others. in will few headwind launch be Well, we a anticipate the be XXXX the of and against as will well quarter wellness well in competing category, big products and certainly But fourth as the new of wearable in trackers. general, that our anniversary as basic we we year the will vívomove do throughout advanced HR numbers

Operator

Our comes Rob from Credit next of Spingarn question Suisse.

Your line is open.

Rob Spingarn

market we the risk look type at start components with it high just to fēnix level, that competition? Or of outdoor less with a is So fitness? saw an there when is we other maturation or Cliff, a outdoor different from that hit level in that any

Cliff Pemble

of for come innovation that's still we're market something we think of. new believe that consumer these We there's I opportunity products doing there's for sure believe that so in additional Well, to and can market, always any though the is market. well risk aware the and

Rob Spingarn

change couple I'm forward, a the rates about just years. think by we go in is I a if when just Just dynamic similar growth lagging as of wondering this

Cliff Pemble

think, launch the Well, against strong of XXXX. significant lapping I very which drove we're fēnix during growth a X,

realistic So prospects about to we we're what looking growth sure we on can there the and say. at XXXX and make trying trying that be overall deliver to

Rob Spingarn

But maybe is for And picks contribution that Doug. smaller the automotive up The bit. I guides, on that the because then we a Is gross that holding or just margin from of ASPs just and there that do is from a about segment, this how segment margin bit -- simply little think little think is Cliff to XX.X%? said true earlier steady. are

Doug Boessen

our The is few is but situation and segment trackers full some these and XX.X% mix. be comparable and are some a growth to as primarily areas then lower our you those is mentioned just a takes where we relatively some such will big margin maybe each it the a of segment that segments. areas a having some what the by anticipate we're driver higher going But year, for puts things margin activity as because of and declines mix into of

Rob Spingarn

you spoke just higher while operating little a to then expenses And the ago.

if facility continues. been the and was to that mention little did CapEx You a going has elevated if I ask you

Doug Boessen

go will million about $XXX XXXX to had CapEx that little probably a million bit we we XXXX. compared in anticipate $XXX S up to the

Operator

Cleveland Our next Research. Bollin of Ben question comes from

Your open. line is

Ben Bollin

assumptions gain when up. follow category? the to following you into at you have of wanted start, Do TomTom’s any the there. guidance exit incremental And then look have business guidance, built I your and fitness I share the a

Doug Boessen

basis, on Europe. fairly was would primary to be TomTom's think the of impact I that an low and market overall contribution

of it's but So needle the the I think certainly overall of moving in that's not the market terms guidance. necessarily in view our overall

Ben Bollin

U.S. where items. you other you tax couple next should And the last How any Thank to the course years. of be about over adjust working and levels couple capital to thoughts you. a that? working How on think then domicile months? in have has elevated potential or of XX the be could little of capital influenced the relative reform And do

Doug Boessen

the tax driver the have U.S. to reform. we’re rate reform, there’s U.S. as in we Regarding domiciled, that -- big in is tax And about yes relates currently talked year-over-year about where it we the Switzerland. tax as

Switzerland Switzerland you after a at Ben, to was effective If compare still corporate rates, those regarding? even changes is U.S. in from current question, rates that is then the lower follow-up statutory in our And standpoint.

Ben Bollin

Working that year from capital to little last here… elevated relative where goes

Doug Boessen

in Working and in capital XXXX that primarily and. look inventory receivables

For similar and year what would of our in growth sales we receivables end to see is. probably our the 'XX, inventory to expect

that due more little there. to you receivables primarily did than receipts a If look increase some XXXX

free more we to tax to back to So probably of DSO expect AR in for But comparisons there, ‘XX our cash would million through a see XXXX, favorability about. some in around in shouldn’t should increases. capital type we saw that continuing we of revenue that to we with taxes with be XX flow, Also, piece less our to free look talked line flow cash probably expect you mentioned the somewhere reform we line would see receipts relating in at working that that looking expect we some increases due due that came January of be our favorability some cash have. would of we $XXX

Operator

from Our of KeyBanc Brad Capital. comes Erickson next question

Brad Erickson

revenue expense start And Doug. to the in One, housekeeping questions two from Marine what the QX? for from Just in exactly impacts mentioned quick then you litigation just was FX.

XXXX curious to if from you tailwinds Just QX can for the and FX? give EBIT guide

Doug Boessen

situation of period is have we you to that what QX Taiwan the disclose litigation, against go that at relates strengthening Then relates in to be with year full able relates have it that things settlement and it partially then number some offset settlement to the there for there we as impact, in that EBIT that as the dollars as the not So you agreements the to to would it also. the the in have agreement.

Brad Erickson

have way normal expense litigation to removed? Marine Where have that for been ask been historically On Marine margins another question, the it. expense would maybe the

Doug Boessen

think there, we yes. margins, in I have put to would Yes, type comparable gross

Brad Erickson

investments autonomy, your just are as level OEM the data, about the pretty I then coming target about call you’ve guess or you’re had highest business. opportunity with obviously for occurring centered thinking in years? think on Auto should guess you we content portfolio higher infotainment And et a portfolio to in Thanks. making OEM cetera. How I years automotive solid what the that for the question that shifts in look we’d Auto of the priority objectives over get there OEM’s towards

Doug Boessen

we've Certainly, related view and with we’ll in software generic the the looking we’ve and infotainment systems those what of systems, clusters mix about what in vehicle, and infotainment the interest talked vehicle. all can of car. seen But stacks business Honda market of silver terms still is we're software with forward, into about people higher in box, of still goes And changing what's run seeing where which announced we've a though other content automobile -- with and kinds platform in Daimler of a kinds in well. BMW the with relationship called be supplying where things talked associated more is and as our which the computing the

the and is vehicle opportunity some but that there in for like software. So computing there's evolution still

Operator

Our Baird. from Will next comes question Power of

line open. Your is

Will Power

quick couple of ups. just Actually a follow

the any OpEx where Fitness within I segments higher that margins, guess perhaps you're Are number So see growth the operating of some the the guess I guess gross you and weakness. that, there? number just category continuation seeing higher that higher likes particular in curious just about we've there? and you one. do that's change Is outlook I And what's looks advanced ongoing I basic to two, Is OpEx. got question activity tracker the market trends? of section lower within know margins there there Thanks. talked be this continue then And I'd forerunner share

Cliff Pemble

all. about first talk margins I'll gross the of Maybe

anticipating we're from comparable margin standpoint, As few the relatively I've of that one a out really consolidates there. for gross segments puts mentioned, takes a are and the so segment mix each maybe

relates Also, our what have in is we where outdoor see the to there you in there have As OpEx, area. too. in the advanced we'll wearables, make actually investments we'll R&D primarily investment Aviation

have seeing auto hopefully as those that at looked given the the So cut the that we're actually at need XXXX, tightening fēnix. back expenses the looking like look fitness where we Then on areas the products up area we'll so activity to really advertising trackers we some in relates those in advertising at our decline advanced area. we're as we related wearable more in of to the

Will Power

tracker And activity on loss market color of color versus that Forerunner any much then just ongoing any trends share the market, sales? is how on any basic and

Cliff Pemble

Our of associated towards are that most really view is is that trends customers advanced the market moving wearables. more with that

has And so matured is rapidly. market and consequently, basic the declining

So they've our what on we to roughly around the and a the basic that across on past as equal said the been side world. market going look what's share assumptions the share are of in basis, typically we've universe pretty global XX%

products. a advanced is see folks off more In see where case GPS it’s vívoactive runners the we our the the trackers and watches, of of smart are into but those our case Forerunner, impact which more product. so basic people line, category, coming advanced In active of opportunity on the terms in are technical into enabled we that's still still falls Forerunner more moving advanced towards that area the the that

Operator

comes Our Financial. Tigress next Ivan of question Feinseth from

is open. line Your

Ivan Feinseth

getting infotainment from new can platform. on of any of feedback is announcement and you question we partnership kind automakers expect kind What My the scalable soon? are

Cliff Pemble

as into demonstrate much automakers and of to the feedback selling this these is getting We’re capability. work

surrounding from think that predevelopment We're them I of terms work. is but feedback comment right so getting we now. seeing of in good can't us from more prototyping announcements, news and been the on you've And that specific

Ivan Feinseth

But if to some you interest in good seem feedback it? getting be and

Cliff Pemble

Yes.

Operator

[Operator question of from Ronald comes next Lynch. Merrill Epstein Bank Instructions] of Our America

open. is line Your

Kristine Liwag

you for strategy There’s what this provide in Part Does do aircraft? middle certified spend that R&D considering new aircraft. for It’s to now if for sheet Kristine need of how are the the to to content XX may managing you would order and would And opportunity much its so, launch clean Ron. new your And competitive? avionic Liwag to shifting of Boeing a on discussion supply chain middle provide be year you in avionics or need aircraft the an in its market Boeing market in calling next.

Cliff Pemble

We're the be would investing that. like infrastructure in again, be by require specific to would do in opportunity taking driven player I Boeing it a in regional be certainly like to to able to to would opportunity it G we around major be of that significant in our need up would we certified build would company a the it aviation. any terms said to I and like it's building Well, feel and as Part hypothetical. commercial be other steps serve in XX certainly the block system is that, we But you such advance certainly more need order prepared that. order serve think investment that in specific have as say applications able able But to and XXXX opportunities.

Kristine Liwag

follow-up seems that also a Embraer and like a are partnership. And to considering Boeing it Air and

-- and to aircraft, already should on aircraft partnership that of today. consider if you've market if you have they the And Embraer any content create got so middle

their partnership And mean because of another content that you ahead, be, the much is give on pursue that timing would possibly how that does you be, a that that investment is likelihood would the if quantify you opportunity? that higher gaining and size then goes plane? So follow-up

Cliff Pemble

Boeing, Embraer terms feel Yes, positioned, our of because we hypothetical Embraer. certainly would between say with of I and like any so in experience well we're partnerships

we've particular part be on so I think it's they happy partnership would mentioned, with consider winning that again, hand the seem have factors doing. But hypothetical any all time. with consistently Embraer to because what supplier all As their we're I they awards in been at

In those to to But terms on able and investments. to that. think to and able investment, I of be said, to make not of as there prepared comment would really timing work and size be certainly we're willing do I

Operator

further I'd like no closing over the Seck for to to questions. remarks. Teri are turn call There back any

Teri Seck

available today. Have are if Doug and a day. everyone. there’re Thanks, great I callbacks Bye.

Operator

thank all have you conference. great gentlemen, program conclude a and you does day. This participating disconnect. and may Ladies for today’s in Everyone the

Garmin (GRMN) 21 Feb 182017 Q4 Earnings call transcript