Garmin Reports Solid Fiscal 2016 Revenue and Operating Income

Garmin Reports Solid Fiscal 2016 Revenue and Operating Income Growth

In addition, the board of directors has established March 31, 2017 as the payment date and March 15, 2017 as the record date for the final dividend installment of $0.51 per share, per the prior approval at the 2016 annual shareholders’ meeting. The first, second and third payments of $0.51 per share were made on June 30, 2016, September 30, 2016, and December 30, 2016, respectively.

Webcast Information/Forward-Looking Statements:

The information for Garmin Ltd.’s earnings call is as follows:

				When:			Wednesday, February 22, 2017 at 10:30 a.m. Eastern
				Where:			http://www.garmin.com/en-US/company/investors/events/
				How:			Simply log on to the web at the address above or call to listen in at 855-757-3897

An archive of the live webcast will be available until April 27, 2017 on the Garmin website at www.garmin.com. To access the replay, click on the Investor Relations link and click over to the Events Calendar page.

This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with similar meanings. Any statements regarding the Company’s GAAP and pro forma estimated earnings, EPS, tax rate and revenue for fiscal 2017, the Company’s expected segment revenue growth rates, margins, currency movements, expenses, pricing, new products to be introduced in 2017 and the Company’s plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors and uncertainties affecting Garmin, including, but not limited to, the risk factors that are described in the Annual Report on Form 10-K for the year ended December 31, 2016 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2016 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

Garmin, the Garmin logo, the Garmin delta, DeLorme, fēnix, GPSMAP and vívofit, are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S.; Garmin Elevate and QuickFit are trademarks of Garmin Ltd. or its subsidiaries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved


Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)


	14-Weeks Ended		13-Weeks Ended		53-Weeks Ended		52-Weeks Ended
	December 31,		December 26,		December 31,		December 26,
	2016		2015		2016		2015
Net sales	$860,767		$781,358		$3,018,665		$2,820,270

Cost of goods sold	389,985		368,215		1,339,095		1,281,566

Gross profit	470,782		413,143		1,679,570		1,538,704

Advertising expense	67,702		56,814		177,143		167,166
Selling, general and administrative expense	114,312		104,556		410,558		394,914
Research and development expense	128,952		106,011		467,960		427,043
Total operating expense	310,966		267,381		1,055,661		989,123

Operating income	159,816		145,762		623,909		549,581

Other income (expense):
Interest income	9,296		7,358		33,406		29,653
Foreign currency losses	(1,648	)	(9,288	)	(31,651	)	(23,465	)
Other income	1,093		8,711		4,006		11,418
Total other income (expense)	8,741		6,781		5,761		17,606

Income before income taxes	168,557		152,543		629,670		567,187

Income tax provision	31,952		20,160		118,856		110,960

Net income	$136,605		$132,383		$510,814		$456,227

Net income per share:
Basic	$0.73		$0.70		$2.71		$2.39
Diluted	$0.72		$0.70		$2.70		$2.39

Weighted average common shares outstanding:
Basic	188,233		189,317		188,818		190,631
Diluted	189,171		189,847		189,343		191,107

Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share information)

	(Unaudited)
	December 31,		December 26,
	2016		2015
Assets
Current assets:
Cash and cash equivalents	$846,883		$833,070
Marketable securities	266,952		215,161
Accounts receivable, net	527,062		531,481
Inventories, net	484,821		500,554
Deferred costs	47,395		49,176
Prepaid expenses and other current assets	89,903		81,645
Total current assets	2,263,016		2,211,087

Property and equipment, net	482,878		446,089

Marketable securities	1,213,285		1,343,387
Restricted cash	113		259
Noncurrent deferred income tax	110,293		116,518
Noncurrent deferred costs	56,151		38,769
Intangible assets, net	305,002		245,552
Other assets	94,395		97,730
Total assets	$4,525,133		$4,499,391

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$172,404		$178,905
Salaries and benefits payable	88,818		70,601
Accrued warranty costs	37,233		30,449
Accrued sales program costs	80,953		67,613
Deferred revenue	146,564		164,982
Accrued royalty costs	36,523		30,310
Accrued advertising expense	37,440		33,547
Other accrued expenses	70,469		74,926
Income taxes payable	16,163		21,674
Dividend payable	96,168		192,991
Total current liabilities	782,735		865,998

Deferred income taxes	61,220		56,210
Non-current income taxes	121,174		101,689
Non-current deferred revenue	140,407		128,731
Other liabilities	1,594		1,637

Stockholders' equity:
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; and 188,565 shares outstanding at December 31, 2016
Shares, CHF 10.00 par value, 208,077 shares authorized and issued; and 189,722 shares outstanding at December 26, 2015	17,979		1,797,435
Additional paid-in capital	1,836,047		62,239
Treasury stock	(455,964	)	(414,637	)
Retained earnings	2,056,702		1,930,517
Accumulated other comprehensive income	(36,761	)	(30,428	)
Total stockholders' equity	3,418,003		3,345,126
Total liabilities and stockholders' equity	$4,525,133		$4,499,391

Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
	53-Weeks Ended		52-Weeks Ended
	Dec 31,		Dec 26,
	2016		2015
Operating activities:
Net income	$510,814		$456,227
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	55,796		51,311
Amortization	30,544		27,049
Loss (gain) on sale or disposal of property and equipment	(503	)	(198	)
Provision for doubtful accounts	4,136		(2,521	)
Deferred income taxes	1,699		5,897
Unrealized foreign currency loss	13,387		37,931
Provision for obsolete and slow moving inventories	26,458		23,257
Stock compensation expense	41,250		26,290
Realized gain on marketable securities	(822	)	(55	)
Changes in operating assets and liabilities:
Accounts receivable	9,000		22,473
Inventories	(2,455	)	(121,718	)
Other current and non-current assets	2,234		(107,360	)
Accounts payable	(11,496	)	36,079
Other current and non-current liabilities	44,766		20,742
Deferred revenue	(6,363	)	(43,338	)
Deferred cost	(15,780	)	(585	)
Income taxes payable	3,017		(151,014	)
Net cash provided by operating activities	705,682		280,467

Investing activities:
Purchases of property and equipment	(90,960	)	(80,592	)
Proceeds from sale of property and equipment	676		7,921
Purchase of intangible assets	(5,715	)	(3,889	)
Purchase of marketable securities	(905,089	)	(915,921	)
Redemption of marketable securities	957,350		919,141
Proceeds from repayment on loan receivable	-		-
Change in restricted cash	146		48
Acquisitions, net of cash acquired	(77,945	)	(38,687	)
Net cash (used in) provided by investing activities	(121,537	)	(111,979	)

Financing activities:
Dividends paid	(481,452	)	(378,117	)
Purchase of treasury stock under share repurchase plan	(93,233	)	(131,413	)
Purchase of treasury stock related to equity awards	(7,331	)	(5,586	)
Proceeds from issuance of treasury stock related to equity awards	18,648		17,073
Tax benefit from issuance of equity awards	1,692		(2,049	)
Net cash used in financing activities	(561,676	)	(500,092	)

Effect of exchange rate changes on cash and cash equivalents	(8,656	)	(31,594	)

Net increase (decrease) in cash and cash equivalents	13,813		(363,198	)
Cash and cash equivalents at beginning of period	833,070		1,196,268
Cash and cash equivalents at end of period	$846,883		$833,070

Garmin Ltd. And Subsidiaries
Net Sales, Gross Profit, and Operating Income by Segment (Unaudited)
(In thousands)
	Reporting Segments
	Outdoor	Fitness	Marine		Auto	Aviation	Total

14-Weeks Ended December 31, 2016

Net sales	$175,397	$274,052	$67,458		$226,595	$117,265	$860,767
Gross profit	$107,852	$141,742	$35,155		$95,977	$90,056	$470,782
Operating income	$58,314	$46,175	$2,995		$19,363	$32,969	$159,816

13-Weeks Ended December 26, 2015 ⁽³⁾

Net sales	$119,884	$228,740	$56,454		$272,221	$104,059	$781,358
Gross profit	$73,353	$117,344	$30,289		$113,257	$78,900	$413,143
Operating income	$40,935	$40,288	($5,593	)	$36,182	$33,950	$145,762


53-Weeks Ended December 31, 2016

Net sales	$546,326	$818,486	$331,947		$882,558	$439,348	$3,018,665
Gross profit	$340,504	$437,205	$183,709		$388,747	$329,405	$1,679,570
Operating income	$184,035	$160,596	$52,167		$102,347	$124,764	$623,909

52-Weeks Ended December 26, 2015 ⁽³⁾

Net sales	$411,184	$661,599	$286,778		$1,062,091	$398,618	$2,820,270
Gross profit	$254,878	$366,139	$158,493		$464,480	$294,714	$1,538,704
Operating income	$139,070	$134,574	$28,611		$136,069	$111,257	$549,581

(3)		Action camera related operating results for the 13-weeks and 52-weeks ended December 26, 2015 have been recast from the Outdoor segment to the Auto segment to conform to the current year presentation.

Garmin Ltd. And Subsidiaries
Net Sales by Geography (Unaudited)
(In thousands)
	14-Weeks Ended	13-Weeks Ended			53-Weeks Ended	52-Weeks Ended
	Dec 31,	Dec 26,	Yr over Yr		Dec 31,	Dec 26,	Yr over Yr
	2016	2015	Change		2016	2015	Change
Net sales	$860,767	$781,358	10	%	$3,018,665	$2,820,270	7	%
Americas	447,537	412,581	8	%	1,521,147	1,469,243	4	%
EMEA	300,764	268,787	12	%	1,110,969	1,013,139	10	%
APAC	112,466	99,990	12	%	386,549	337,888	14	%

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