GRMN - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Garmin Ltd. Fourth Quarter 2019 Earnings Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Teri Seck, Manager of Investor Relations.

Teri Seck

everyone. morning, Good to like to Ltd. Garmin We welcome would you Call. Fourth Quarter Earnings XXXX of Internet earnings Please Investor at the available note Relations www.garmin.com/stock. press on and that the release related slides are site at Garmin's webcast An website. our and archive of related will available also transcripts on be the

business. forward-looking in includes revenues, earnings its Garmin. our earnings, results dividends, operating affecting and and occur, statements This growth Form the with our Ltd. of The Exchange earnings could statements market Garmin events may actual future and objectives plans factors statements. future introduction, contained and for circumstances and risk and products Information discussed projections XX-K filed call concerning regarding future result this and and shares, forward-looking a our the call Securities in other these regarding forward-looking and differ Any position, risk Commission. demand as materially is product financial margins not factors are

Cliff this would like Financial Presenting Officer Pemble. I At time, on the Chief behalf this Chief are and Boessen, Ltd. of Treasurer. morning to Officer; Pemble, Doug and Garmin over and Cliff to call Executive turn President

Clifton Pemble

Teri, everyone. Thank good and you, morning,

XX% strong, to and earlier finished announced we year. quarter prior prior increased XX% revenue collectively $X.X outdoor the XXXX today, the for increasing billion. As Fitness, marine over year with aviation, over the

of the increased of over during quarter, forma year. EPS increase XX%. margin Operating pro of XX% XX.X%, year. generated prior operating to the in margin EPS was XX% income XX.X% the and compared Gross improved to These an $X.XX and $X.XX GAAP prior results

improved increase improved to record $X.X EPS record accomplishments. of XXXX Combined marine of full million, XX.X%, an from for Revenue fitness, outdoor Gross billion, in was representing and Looking increased pro a of to $X.XX and forma to This remarkable year margin XX.X%. new margin achievement. prior the income our XX%. EPS year increased increased year. performance. briefly another and XX% aviation, $X.XX, revenue Operating operating XX% Garmin. a of over XX% resulted over to $XXX GAAP at

results, Doug segments. past of shareholders In dividend increase. our a strong a first, in and highlight in to few representing greater I'd discuss X% the annual but to outlook year from in results annual each share, financial these a of meeting, some light be X will our $X.XX business at approve of asking detail we'll an achievements our minutes, like upcoming

with XXXX was category performing an outstanding segment, fitness year our product each for well.

wellness final we these and year, contributors products the and in the year. strong During launched cycling updates our running, product to were lines, the sweeping quarter of

expanded Tacx cycling In all year addition, revenue ability the customers our long. recent serve acquisition segment to indoors and and our new of outdoors brought to

time. were the by for X% over year. first For build the to year, Tacx fitness revenue Gross momentum we exceeding billion XX% launching plan increased the while $X distribution respectively, XX%, products prior XX%, operating In new on and and the operating and margins of this threshold from also feature-rich products. expanding income increased XXXX,

segment fitness from for increase we will year. a result, XX% the As anticipate revenue the approximately

modern segment. even contributed year as other basis, in recognize aftermarket more. XXXX of We aviation a growth on for electronics. systems extraordinary was cockpit strong ADS-B but combined significant the an growth, a to categories proposition value our experienced contributor was customers

demand driven aircraft. systems popular by for from aircraft We experienced also growth increasing trainer new and in OEM

year. over aviation the revenue income and prior increased were increased from and XX% the operating and For year, margins respectively, XX%, Gross XX% operating XX%.

by revenue XXXX, will anticipate in declining revenues. systems For to aftermarket of growth that comparable we for XXXX be offset aviation that as is ADS-B

by driven line the XXXX. a by part weaker of be early with demand, half should will the cycle. OEM broader We anticipate market be strongest we of the followed peak move year the inevitable past in the in back that ADS-B the of those residual as Trends ADS-B

are long-term and on ahead, that confident in lie the opportunities growth focused aviation prospects are We we business. for our

Our and share we've performance. to and our speak glow and highlighted boosted growth marine our Garmin HALO market another entire of From for and time year cast market gains achievements impressive segment the results, products across themselves a technologies, positive that time, delivered brand.

sales sonar broad a that excitement one LiveScope example Panoptix generating Our is of across products. system is range and strong

bring motor, introduced the features to is product also trolling a electric first and category for market. which our new game-changing We us new

year, revenue $XXX XX%, margins million income to exceeding and operating XX%, time. XX%. respectively, threshold and XX% and the the operating from the For improved Gross increased marine for increased first

strong, in interest forward, Looking season. boating entering our very XXXX products the remained

the our marine segment products will addition, increase of market will grow their from some standard our XXXX brands With boat mind, revenue most this as category adopt share in XX% we In the in as models. the equipment respected anticipate year. OEM for on the approximately

revenue growth. Outdoor of delivered and achievements year strong another product

we we watch refreshed the adventure and year, the the completely series. MARQ luxury launched series, During watch fenix

also market. technology, We with versions fenix with resonated the of passive introduced recharging positively has solar the which

from respectively, increased XX%. the over prior XX% and operating XX% operating year. and revenue Gross were the income For outdoor year, margins increased and XX%,

ahead, Looking new to adventure watch we will that grow in by category utility. driven further the believe continue innovation

potential appreciate grow two convenience remote communication. people believe to of also the inReach that We and life-saving as will more continue way

increase mind, we segment outdoor XX% in approximately anticipate year. revenue With will from the the for things these

new strong digital and delivered our line, Our auto Alexa segment navigation achievements the assistant Overlander also XXXX. PND a the launch entered of integrated product the category in with into we We product many device.

captures Cam outside vehicle, announced lighting and conditions. of we Consumer regardless At the the the inside Dash recent that Electronics both new quality video Tandem Show,

we world's also a to as most X backlog secured automakers. significant new business Tier year, supplier a the the of During respected

XX%. margins respectively, and For the XX% auto prior Gross the operating to over year. year, revenue decreased and from XX% XX%, income improved operating increased and

of programs announced in negative previously Looking ahead, from the increase will trends back in as OEM we contribute half contributions believe that and auto year. categories specialty the as moderate the

awarded accelerated recently support of be XXXX programs. to investment a will also year

We are for our facility in manufacturing Olathe production. auto OEM equipping

We facility in Europe production. new are opening a dedicated will be to OEM manufacturing that auto

support additional in and engineering intensive these hire to operations programs. also plan development resources to We complex,

things in that the segment these mind, for year. from With anticipate revenue will the X% decrease auto we

summary, we about the every we excited business opportunities are see in segment. In

revenue that approximately anticipate the aviation that we comparable offset in than up marine $X in year-over-year anticipate consolidated outdoor more XXXX, will X% XXXX. slight We billion, in reach decline For be revenue growth as to of will and fitness, auto segment. a

of to forma of effective growth $X.XX. approximately We share XX%, support approximately of of rate operating year initiatives. reflecting XX.X%, of our We an a earnings XX.X% in full tax for pro resulting pro forma anticipate gross margin level investment long-term margin approximately and increased a approximately plans per anticipate

the to Doug providing transaction from details Our estimated be on tax several will favorably intellectual few impacted property this more ownership over by moments. an consumer to a of rate will in be next the a years. United Switzerland intercompany migrate the States

So that remarks. concludes my

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

Douglas Boessen

Thanks, Cliff. Good everyone. morning,

fourth a basis basis from billion Gross sales representing decrease begin from margin and sheet, margin the year. cash comments full reviewing prior Operating and a increase a XX% was Let's of from $X.X XX our point percentage We was fourth year. point XXX XX.X%, XX% give and the revenue results the year XX.X%, on over expense flow Operating increase quarter, taxes. $XXX prior posted prior financial decrease for year-over-year. quarter by statement XX%, the increase was income prior basis point XXX from Operating million, the as the year. was year. balance

the increase EPS forma was from $X.XX, prior year. XX% $X.XX, a EPS and Our pro was GAAP

basis increase Looking of at the we over full from XX.X%, prior the Operating Gross increase over increase a basis prior basis Operating from million, was sales was from prior a year. a XXX percentage posted income was increase as Operating the XX% year. the expense $XXX results, margin revenue of year points XX XX.X%, of the year-over-year. representing billion, prior point was XX% year. decrease margin XXX $X.X year. XX.X%, point

GAAP forma increase Pro prior XX% Our $X.XX, was EPS a year. EPS from was $X.XX.

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

by we growth, X with quarter, fourth of marine with fitness the followed strong of our growth and the and XX% XX%. at by X segment segments XX% in outdoor During growth of aviation segments double-digit led growth achieved

XX% X our segments. year growth, of X XXXX, For achieved in consolidated full the double-digit growth we

next fourth grew grew quarter the revenue operating a On and basis, to marine aviation, in income. of to compared fourth from fitness, Looking Aviation the revenue XX%. in outdoor and to quarter. segments XXXX to the combined Fitness XX%. XX% from total quarter year XX% contributed XX% prior XX%

operating besides aviation, income our in in to illustrate mix XXXX. of All profit Fitness, delivered the segment. had collectively and the fourth by operating Let's segment income increases XX% outdoor XX% charts of year-over-year in compared segments XXXX of quarter segments marine auto see dollars. quarter the fourth to these

Looking next to year full charts.

total in operating marine revenue increases full up dollars. the outdoor in segments aviation, year-over-year made of compared For XX% to All XXXX. and year, fitness, segments XX% had income

Looking quarter year-over-year $XX next costs to in with associated recent and or $XX operating to operating expenses. expenses resources, increased million acquisitions. Fourth XX%. due engineering Research incremental increased development million investments by

costs a Increase to increased to prior to quarter to point associated sales, due year. acquisitions. to of was basis due prior expense year. Our sales decrease million recent to percentage of compared the but from fitness represented outdoor compared year point SG&A and basis primarily year $XX XXX decreased advertising incremental prior increased expenses, compared decrease XX $X as prior approximately the quarter XX.X%, with higher million personnel-related expenses, X.X%

to highlights increased to the of product few of sequentially quarter the Accounts to balance year-over-year and and in quarter. balance on A We our dividend the receivable year-over-year to marketable lines diversified ended increasingly payments. increase the holiday Increase sales with strong our $X.X statement supply due data billion. to million. cash due cash flow Tacx. and to Inventory strategy acquisition $XXX securities support increased million $XXX is sheet,

fourth we flow quarter the cash free $XXX million. During XXXX, of generated

needs. we flow XXXX, free million cash year approximately prior due generated full the year the increased to decrease capital $XXX For million, from $XXX working of

cash XXXX the per quarter, $X.XX Proposal, per of the We expect an of from X% dividend XXXX, $XXX dividend million per For $X.XX of share. beginning we shareholder or announced our expenditures. with be capital increase for to approximately $X.XX a seek cash approval payment. approximately current per million, the plans share dividend in our $XXX flow it's free share June increase quarterly to

tax revaluation the expense benefit includes due tax as $XXX income For Switzerland which full a step-up of assets million of year of deferred Switzerland to tax million, tax and of result we reform. an certain XXXX, $XX income reported

year. XXXX million was tax the year prior full forma income benefit, rate tax Excluding basis the point effective $XXX XX the from decrease pro XX.X%,

to efficient an The ownership the consideration responds into from recent to favorable percentage structure global agreement decrease United migration to property the This and recognized expense from effective income changing payments. tax forma royalty tax shifts in through intellectual license tax in due XXXX at related remarks. an that of concludes tax tax of our in States. Switzerland income ownership major intellectual higher our fiscal And agreement, migration by States, is landscape. the Migration multiyear Switzerland shift United for the Taking products jurisdiction, level primarily United maintained XX%, our year the rate formal and property to expected uncertain positions. intercompany United license States reduces States, to results Switzerland includes the to were a consumer reform of which

can Q&A? line the Mike, open you please for

Operator

[Operator Instructions].

from Crédit comes Robert Suisse. Spingarn first the question from line Your of

Robert Spingarn

those tough for just compare we to guide think wanted 'XX bit that I about relative Cliff, looking lot retrofit And upgrade. associated a was ADS-B getting how I -- into is then you here. you're the -- second contemplate we've forward? little in 'XX? from were how question, That's extent shop of And aviation ADS-B activity do of been as think revenues do in fade first the the the now size in but any mandate what some through the you driving versus to with 'XX, when your investors a for of aircraft the And dig question. associated

Clifton Pemble

Yes.

out approximately we about as XXX,XXX you equipped that XXX,XXX. of park, exited were airplanes of had total if been there a will, the So year,

over something will those of left aircraft We that there's that all to could ideally, be don't think XX,XXX So mean that would equip. be.

be are some those best be the of Some for airplanes from scrapped, that shape and going those, to sure. maybe so probably in fallout aren't might there's

and then activity most down QX. QX activity in in in tend We go QX would expect place would QX. that and of And the the to take some

come a to shop In at retrofit been true of particularly the would of activity, in people towards ADS-B we it's say, as while has the of real issue. that terms end got prompted the other look and mandate, capacity 'XX, probably things I most

been have not a to wanted people result, as So they able to. do may everything that

of we've are generating great lot introducing products, interest. And of these and a been meanwhile, a lot new

the come put So more. we for their time, that all bill too. back people reality And the needs and expect of would to is one do at big not that wants down everybody will retrofit

may to later. continue they So more then watch and do shop and

still So grow. we're optimistic that think We lot has about to the a it of retrofit room market.

Robert Spingarn

if on XXXX, something rate of you QX it, ADS-B So a little let's if what fair know, than -- XX% there's the call it is little reflecting maybe and more? quarters probably see bit decline so, say you're that a lower said, just a don't a back of or activity and to of anticipating like, I QX

Clifton Pemble

that be to is products There's specific a I don't introduced. market We not to that features, on have guidance new Yes. because that you new are tell need ADS-B goes X that. replaced. transponders would

market So need out there. for there be underlying course, airplanes an ADS-B. ADS-B And will of always always new

be a of going ADS-B run will forward. there rate So

Robert Spingarn

Okay. if to And wanted And coronavirus the ask to what that's you've I -- just me. then -- factored guide? you it into for extent

Clifton Pemble

Yes.

coronavirus, situation, don't would I up that. -- and in we say cases even room early it's of think still a make we're the to to for there's emerging so an be that. some but So if year, peaking, seem impact, there's watching like we feel the short-term I also lot it's

other game a for So impact us online. change are people. then, and situation far, has our there. we're go lot us back course, continues the of But and If outbreak safety to of things optimistic minimal, has our helped that now, that the on, would coming been for stock

seem suppliers it. to period of ramp-up be although, there's coming a Our back through managing we're obviously, all that

Operator

[Operator Instructions].

& Your Company. next Dougherty question comes from from Charles Anderson

Charles Anderson

to stellar with A start XXXX. want Congrats few on automotive. I things.

the one, income, think that BMW? there. lower bit R&D. I the of I number curious start-up looks was like just ahead QX a higher operating was Was little

know your to highlight did the then in drives recently, about and but comments you Ford if deal some Europe. those are Cliff, you production about others make then facilities there And remarks, I in U.S. the any prepared in wonder I that together. talked putting

a lastly, then has PND basing know probably kind on to And automotive. there. we're I'm not continued headwind. assuming of I be

in curious what terms rate of the embedding the in kind just maybe So business. guidance of PND of you're in the decline

Clifton Pemble

Yes.

as of noncapitalized projects. So lower income in of increased items onetime the well associated was as mix terms some operating R&D in there QX, with there a

to overall PND side So both of The auto profitable. generally very operating the those kind income. of came is lower together

a so continue specialty something to see we And of also behaviors shift advanced And the bigger offer. we're We see not about. of in mix. that we that's as a do although products decline products buying to worried that pace as the in at a more terms will become XXXX, the moderated part market

our in So that's news all good view.

the And will in investment BMW. we European able factories American the terms for our the In BMW that plan production that to the U.S., be program of supply here the most then North win European few BMW production. recent equipping back for for years supply won we're factory the a to is

Charles Anderson

for Okay. And corporate kind how purposes. and if terms cash any of follow-up, the update the where my with you for -- to where change you just that isn't is there. accessible wonder if sort made us there's where just tax could in influences cash Perfect. rate, that that of I everything of accessible, of stands, then corporate on sort impacts I'm curious change

Douglas Boessen

Charlie. thanks, Well, Sure.

not where that. So it to cash as it is, relates the does change

the went or let color transaction you little through. that a bit detail little So give a more we of me on

States. between relates the this So license agreement to and Switzerland United intercompany

the Switzerland is going a paying United we royalty that IP consumer And be to to Switzerland. of certain for States in payment have so situation use is the

of lowers So that, as the recognized it Switzerland. income a the result amount in that States, increases of in United

a result so And jurisdiction us period. favorable mix as of by gives that, license during income that that

to period, So be percentage higher going is will license of the that during the the U.S. income situation the a

Operator

Nick from comes question Research. next from Your Longbow Todorov

Nikolay Todorov

results. XXXX great on Congrats

Clifton Pemble

Thanks, Nick.

Nikolay Todorov

your expanding on for sense up you time, specifically We margin the give can I XXXX. view, since believe, before. some tax I that we some XXXX. also you gross dipped additional in And online coming tax overall should gross in Cliff, think or having about you're first talked XXXX margin fitness see about for XX% fourth quarter in In think how us of capacity XXXX? distribution below

So can should you color give how us about some we that? think

Clifton Pemble

Yes.

fitness for as to line, were in gross segment. the lot gross particularly of a that sold, holiday dilutive is the tax product the of fourth Products product itself margins So is promotional. margin, by a that influenced is that we've quarter, slightly we season, obviously, And the had said mix. products overall before, and the

under all the we're just products the go generally, result the for and would we depending of so kind year that the targeting segment. And to and of XX% expect on seasonality a was of to operating obviously for And offer. mid- as high-teens margin XX% progresses that gross We a segment. the down margin mix. up that around And

Nikolay Todorov

you our Or that? expected million, Okay. assuming I it. else something there I side correctly, forth? coming increase. $XXX not mistaken. Am so to Got and facilities on And is said I'm for XXXX around and to investments That's the about Doug, that's auto believe Xx from is be if CapEx mostly an

Douglas Boessen

Yes.

elevated level me -- let compared it at yes, So you give to is an XXXX.

and us XXXX. yes, will into XXXX be investment going to relates as So CapEx it an year probably for

OEM what's relating making some exactly mentioned. that auto to investments is our business. We're So driving what Cliff

for Netherlands be Also, Tacx we in a a are for Also, facility that acquisition. building new manufacturing European equipping manufacturing we OEM. our here for Olathe facility, are OEM. facility So facility in opening to handle we'll

facility Another our overall piece Olathe relates expansion. to

well is What doing complete drivers actually operation expansion renovating we We're there. If big manufacturing space previous our that our as our R&D and our for increased we the with to new renovating we're distribution. built as as facility work well now increase headcount a because our We're you of manufacturing have. to as remember, support facility that. innovation,

Nikolay Todorov

basis higher expenses for Yes, And XXX some across Or give coming board? us sales, up expenses? color? I from mostly increase Is as last it you Can about the is of in see. operating it guidance percent implied me. assumes The one points of a R&D Doug.

Douglas Boessen

Yes, sure.

So as a give you that it by bit to expense, operating a flavor to relates of XXXX little category.

advertising. on First,

we sales, we a be would advertising, keep sales more percentage line consistent spend to dollars, in advertising to that with try year-over-year. probably expect advertising but our growth. of For We'll our relatively

As be will relates yes, sales it of year-over-year. R&D, there to percentage R&D increased a as

We a to or as as be to points up probably be expect relates basis expect about so. then percentage points. we it about that maybe XXX XX sales, of SG&A basis to And that up

business. So driving growth, to we one for about expenses increased is of increased the so really that what's revenue situation support OEM our is that operating really which talked

some making systems -- there. different occur It well for R&D there. we're operations IT investments So increased as as

From we'll in we'll an is impact to and impact front, the to items. notably XXXX, products. some in full some our there innovation we year R&D year And invest would we have make those lastly, full Tacx that overall, in sure that of is say R&D continue I that to did acquisitions, most have

really support CapEx items our we as expense increased the as of revenue. all the growth So into to about top line talked well is

Operator

from Baird. Power Your from question next Will comes

Charles Erlikh

little Will. you're strength fitness standout what it's the the in like on segment about that specifically it real talk you strong fitness wanted XXXX, the And year to more looks Erlikh a for another Could and ask in in been year. next about expecting a drove This strength? Charlie is I quarter.

to continues the you been Apple well where really successfully environment well? to how do have navigate So able as competitive

Clifton Pemble

for quarter a we well. X all very refreshed products, of the running very the lines, holiday the then so drove for us, activity some promotional introduced think product the they as completely the strength, sales around lot with vívoactive did product popular for we We new Venu, the also in year. got products, separately, last quarter. Charlie, of those was our And lines previous are product which lines as of year really new generation and new I well that very

just feel that around has I of competitive drivers the say landscape terms would In lot. landscape, like the a generally we narrowed

out and active wearability, Of metrics. wearables total all-day, that And lifestyles. Apple and just specifically that is terms Apple track we products detailed of XX/X, from there share. others with in we a one battery the on course, believe health long We our differentiate focus are for big ability life market to built

believe So with we're we're very well our doing space. focused on those categories, we very and

Charles Erlikh

that billion Great. surpassing congrats That's accomplishment. makes an $X quite And Yes. in No, sense. on revenue.

Clifton Pemble

Yes. you. Thank

Operator

Instructions]. [Operator

from Stanley. Your from Woodring comes next question Morgan Erik

Erik Woodring

quick procedural here. question a Just

tax normalized a As XXXX about And the I going should think this beyond and intact think I tax forward, basically think should we XXXX Or that as XX% rate about have is somewhat license about the we out? follow-up. rate as beyond how XXXX? into

Douglas Boessen

Yes.

as the relates rate, our we tax not to So any year. current beyond detailed do give it guidance

license we have place, time, going a will license a there's of such. have, perspective of no that by in of tax while by number favorable income as at the releases high-level amount have U.S. agreement the So -- higher income we Then the while from when things impact our income income way mix that a we by is in agreement that have percentage we'll jurisdiction. a to reserve point longer rate, country, that from see segment, But we the really all income that

we So of lot at what we that as possible. that's of there's But said, maintain efficient structure it's I that it to puts tax make rate, like looked takes that and something directionally is. but sure a as a tax do in

Erik Woodring

you're going Perfect. business business, imply in towards That's think I would the a from imply shift business OEM then, of away see about super guess, just to I more mix And your guidance if your auto's the helpful. guess, and commentary XXXX. what that would I the

about love in margins? at I'm guess I tailwind takes to of this what to margins? is puts headwind to shift you and Just mix XXXX. auto think gross a so margins would gross the trying hear get is, to as And A gross kind

Douglas Boessen

Yes.

will to a correct. In as auto total, segment margins, be the of it total. you're OEM the a percentage relates as higher So gross

situation PND. So are lower that gross margins where be OEM auto will a than the

impact be the and that total decline that XXXX. will So margin gross auto will in something

Operator

next comes Chung Paul from question Your JPMorgan. from

Paul Chung

working think you cap then should a of that was cap as XXXX, we drag and for 'XX, a Tacx. had think from cash about So how about we 'XX working But of flow kind in free part And kind year? dynamics? flow conversion is back then what cash you And the your we Should kind for like guide this of expect of as year? bounce free in and think aviation the OEMS, a have then we business, about patterns first from think the half -- in last year call for in prior seasonal to seasonality years? half to year you pickup a But should some a out. lot have anything flow-through pieces. you follow-up. And relative want and so I moving in about second kind Or then how auto last of of

Douglas Boessen

Yes, sure.

relates it correct. as XXXX, to you're for So free flow cash

start we'll with XXXX. First,

for mitigate we supply, working area. primarily of inventory because as in increase situation, significant increased because increase made we some Brexit, year-over-year. of did in increase Tacx, of the XXXX, had as needs, sales capital So -- capital talked all we things yes, stock days our to That AR basically type about, our our well as have to previously XXXX, just those of safety strategy a

to to turning XXXX. page Now

bounce to flow cash free our expect back. We

Our current million. $XXX XXXX cash for for flow are estimates about free

needs capital we're XXXX we in So year-over-year that anticipating that, XXXX. of and the with same had not have working to type

inventory to to would say, in of increase year-end sales from should XXXX -- function probably the more we that step XXXX levels, as with expect have. inventory relates a we line I type inventory, what not the but increase, it

some cap. we'll to benefit in relating in I working have XXXX situation So that get

through As were we to out building the relates it situation it inventory how throughout year. the is the year, falls

line be of first have there'll we year, higher get the the the go situation year-over-year in hopefully, quarters. as few probably of may forward. end situation the the by that inventory will be where a as we sales than where a through But it So -- year we level just with have in we

CapEx also, we about. to offsetting we talked that then also. That's But plays into partially increased which that have, CapEx previously

So the in building we're future. to go investments for back making some us for it, increased for there the to revenue

Paul Chung

of to your seasonality on increase year? the follow-up the could then kind pretty also then OpEx, be And top And you. that. is of that Got if going in line, measured throughout you

Douglas Boessen

Yes.

as you top relates give high-level some on real to it So the that. points I'll line,

to situation to year, in Tacx. alluded related of OEM. to the the I our think relating auto, of of mention, that back half see fitness acquisition increase the you'll the business of some side I Also, should the Cliff in

So -- or QX in that. quarter, the benefit get Tacx was acquisitioned, some was that we'll to so first second relating

of kind So And I related of we that moving will to some will seasonality where that be expenses OpEx, be here it basically relates said build the to to revenue. then those started operating as something QX in XXXX. into

see we'll So the year. that be that throughout something that will build

Paul Chung

your was in for of that then should in expanding lap of it efforts What baking distribution Tacx? XXXX? Okay. for And the half think in about we for last on second in in XQ, contribution then quarter? growth kind Tacx. you How the as of the question fitness how kind And are we growth much the

Clifton Pemble

Yes.

of of of the growth of we're fitness comping growth saw less we we the X the acquisition that comp in organic. was Tacx. that XXXX the course, So majority than we quarter that Tacx in against basically half we saw. until was And have

had our would So organic XXXX. we for we year going as a products to course, then, the Tacx anticipate then, growth, contributing the be forward outlook strong of expanded and distribution in wearable all for

Operator

at turn no am this I to further would Seck. Teri time. showing the now I questions like to conference back

Teri Seck

everyone. Thanks,

available Bye. day. We the have day. calls for and wonderful Doug throughout hope always, are As I a you

Operator

conference. today's this have and day. Thank gentlemen, a and participation, concludes wonderful for Ladies you your

disconnect. now may You

Garmin (GRMN) 19 Feb 202019 Q4 Earnings call transcript