Garmin reports fourth quarter results

 

 

 

Dividend Date

 

Record Date

 

$s per share

June 30, 2021

 

June 15, 2021

 

$0.67

September 30, 2021

 

September 15, 2021

 

$0.67

December 31, 2021

 

December 15, 2021

 

$0.67

March 31, 2022

 

March 15, 2022

 

$0.67

In addition, the board has established March 31, 2021 as the payment date and March 15, 2021 as the record date for the final dividend installment of $0.61 per share, per the prior approval at the 2020 annual shareholders’ meeting. The first, second and third payments of $0.61 per share were made on June 30, 2020, September 30, 2020, and December 31, 2020, respectively.

Webcast Information/Forward-Looking Statements:

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

When:

Wednesday, February 17, 2021 at 10:30 a.m. Eastern

Where:

https://www.garmin.com/en-US/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 February 16, 2022 on the Garmin website at www.garmin.com. To access the replay, click on the Investors 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 “anticipates,” “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with similar meanings. Any statements regarding the Company’s expected fiscal 2021 GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the Company’s expected segment revenue growth rates, consolidated revenue, gross margins, operating margins, potential future acquisitions, currency movements, expenses, pricing, new products launches, statements relating to possible future dividends, statements related to the ongoing impact of the COVID-19 pandemic, 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 26, 2020 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2020 Form 10-K can be downloaded from https://www.garmin.com/en-US/investors/sec/. All information provided in this release and in the attachments is as of December 26, 2020. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

This release and the attachments contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the Company's use of these measures are included in the attachments.

Garmin, the Garmin logo, the Garmin delta, Descent and Tacx are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S. Garmin SubWave, and Striker, 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13-Weeks Ended

 

 

52-Weeks Ended

 

 

 

December 26,

 

 

December 28,

 

 

December 26,

 

 

December 28,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net sales

 

$

1,351,405

 

 

$

1,102,233

 

 

$

4,186,573

 

 

$

3,757,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

560,422

 

 

 

462,777

 

 

 

1,705,237

 

 

 

1,523,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

790,983

 

 

 

639,456

 

 

 

2,481,336

 

 

 

2,233,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising expense

 

 

61,135

 

 

 

62,648

 

 

 

151,166

 

 

 

164,456

 

Selling, general and administrative expense

 

 

158,910

 

 

 

138,280

 

 

 

570,245

 

 

 

518,568

 

Research and development expense

 

 

199,672

 

 

 

162,005

 

 

 

705,685

 

 

 

605,366

 

Total operating expense

 

 

419,717

 

 

 

362,933

 

 

 

1,427,096

 

 

 

1,288,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

371,266

 

 

 

276,523

 

 

 

1,054,240

 

 

 

945,586

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

6,744

 

 

 

13,069

 

 

 

37,002

 

 

 

52,817

 

Foreign currency gains (losses)

 

 

12,627

 

 

 

(4,230

)

 

 

2,825

 

 

 

(16,799

)

Other income

 

 

828

 

 

 

2,051

 

 

 

9,343

 

 

 

5,618

 

Total other income (expense)

 

 

20,199

 

 

 

10,890

 

 

 

49,170

 

 

 

41,636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

391,465

 

 

 

287,413

 

 

 

1,103,410

 

 

 

987,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

 

57,918

 

 

 

(73,379

)

 

 

111,086

 

 

 

34,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

333,547

 

 

$

360,792

 

 

$

992,324

 

 

$

952,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.74

 

 

$

1.90

 

 

$

5.19

 

 

$

5.01

 

Diluted

 

$

1.73

 

 

$

1.89

 

 

$

5.17

 

 

$

4.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

191,278

 

 

 

190,165

 

 

 

191,085

 

 

 

189,931

 

Diluted

 

 

192,303

 

 

 

191,225

 

 

 

191,895

 

 

 

190,899

 

Garmin Ltd. And Subsidiaries

 

Condensed Consolidated Balance Sheets (Unaudited)

 

(In thousands, except per share information)

 

 

 

 

 

 

 

 

 

 

 

 

December 26,
2020

 

 

December 28,
2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,458,442

 

 

$

1,027,567

 

Marketable securities

 

 

387,642

 

 

 

376,463

 

Accounts receivable, net

 

 

849,469

 

 

 

706,763

 

Inventories

 

 

762,084

 

 

 

752,908

 

Deferred costs

 

 

20,145

 

 

 

25,105

 

Prepaid expenses and other current assets

 

 

191,569

 

 

 

169,044

 

Total current assets

 

 

3,669,351

 

 

 

3,057,850

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

855,539

 

 

 

728,921

 

Operating lease right-of-use assets

 

 

94,626

 

 

 

63,589

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

306

 

 

 

71

 

Marketable securities

 

 

1,131,175

 

 

 

1,205,475

 

Deferred income taxes

 

 

245,455

 

 

 

268,518

 

Noncurrent deferred costs

 

 

16,510

 

 

 

23,493

 

Intangible assets, net

 

 

828,566

 

 

 

659,629

 

Other assets

 

 

189,845

 

 

 

159,253

 

Total assets

 

$

7,031,373

 

 

$

6,166,799

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

258,885

 

 

$

240,831

 

Salaries and benefits payable

 

 

181,937

 

 

 

128,426

 

Accrued warranty costs

 

 

42,643

 

 

 

39,758

 

Accrued sales program costs

 

 

109,891

 

 

 

112,578

 

Deferred revenue

 

 

86,865

 

 

 

94,562

 

Accrued advertising expense

 

 

31,950

 

 

 

35,142

 

Other accrued expenses

 

 

149,817

 

 

 

110,461

 

Income taxes payable

 

 

68,585

 

 

 

56,913

 

Dividend payable

 

 

233,644

 

 

 

217,262

 

Total current liabilities

 

 

1,164,217

 

 

 

1,035,933

 

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

116,844

 

 

 

114,754

 

Noncurrent income taxes

 

 

92,810

 

 

 

105,771

 

Noncurrent deferred revenue

 

 

49,934

 

 

 

67,329

 

Noncurrent operating lease liabilities

 

 

75,958

 

 

 

49,238

 

Other liabilities

 

 

15,494

 

 

 

278

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Shares, CHF 0.10 par value, 198,077 shares authorized and issued, 191,571
shares outstanding at December 26, 2020; and 190,686 shares outstanding
at December 28, 2019

 

 

17,979

 

 

 

17,979

 

Additional paid-in capital

 

 

1,880,354

 

 

 

1,835,622

 

Treasury stock

 

 

(320,016

)

 

 

(345,040

)

Retained earnings

 

 

3,754,372

 

 

 

3,229,061

 

Accumulated other comprehensive income

 

 

183,427

 

 

 

55,874

 

Total stockholders’ equity

 

 

5,516,116

 

 

 

4,793,496

 

Total liabilities and stockholders’ equity

 

$

7,031,373

 

 

$

6,166,799

 

Garmin Ltd. And Subsidiaries

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

52-Weeks Ended

 

 

 

December 26,
2020

 

 

December 28,
2019

 

Operating Activities:

 

 

 

 

 

 

 

 

Net income

 

$

992,324

 

 

$

952,486

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

78,121

 

 

 

71,921

 

Amortization

 

 

48,594

 

 

 

34,254

 

Gain on sale of property and equipment

 

 

(1,799

)

 

 

(233

)

Unrealized foreign currency (gains) losses

 

 

(9,873

)

 

 

18,663

 

Deferred income taxes

 

 

6,931

 

 

 

(88,358

)

Stock compensation expense

 

 

80,885

 

 

 

63,400

 

Realized (gains) losses on marketable securities

 

 

(1,392

)

 

 

(799

)

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable, net of allowance for doubtful accounts

 

 

(108,859

)

 

 

(123,401

)

Inventories

 

 

28,726

 

 

 

(170,169

)

Other current and non-current assets

 

 

(33,690

)

 

 

(86,073

)

Accounts payable

 

 

1,447

 

 

 

26,192

 

Other current and non-current liabilities

 

 

87,761

 

 

 

36,660

 

Deferred revenue

 

 

(25,211

)

 

 

(11,032

)

Deferred costs

 

 

11,973

 

 

 

9,335

 

Income taxes payable

 

 

(20,671

)

 

 

(34,297

)

Net cash provided by operating activities

 

 

1,135,267

 

 

 

698,549

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(185,401

)

 

 

(118,031

)

Proceeds from sale of property and equipment

 

 

1,977

 

 

 

529

 

Purchase of intangible assets

 

 

(2,065

)

 

 

(2,377

)

Purchase of marketable securities

 

 

(1,052,640

)

 

 

(789,352

)

Redemption of marketable securities

 

 

1,126,253

 

 

 

758,774

 

Acquisitions, net of cash acquired

 

 

(148,648

)

 

 

(300,289

)

Net cash used in investing activities

 

 

(260,524

)

 

 

(450,746

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Dividends

 

 

(450,631

)

 

 

(417,264

)

Proceeds from issuance of treasury stock related to equity awards

 

 

15,201

 

 

 

27,122

 

Purchase of treasury stock related to equity awards

 

 

(26,330

)

 

 

(25,886

)

Net cash used in financing activities

 

 

(461,760

)

 

 

(416,028

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

18,127

 

 

 

(5,942

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

431,110

 

 

 

(174,167

)

Cash, cash equivalents, and restricted cash at beginning of year

 

 

1,027,638

 

 

 

1,201,805

 

Cash, cash equivalents, and restricted cash at end of year

 

$

1,458,748

 

 

$

1,027,638

 


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