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Garmin's 2008 results

gatorguy 326 Points
edited November -1 in GPS Discussions
This came as a total surprise to me, as I expected to see a small profit if any. Something to pay particular attention to is that Garmin remains debt-free. Results courtesy of our British friends.

CAYMAN ISLANDS--(BUSINESS WIRE)--Garmin Ltd. (Nasdaq: GRMN) today announced fourth quarter results for the period ended December 27, 2008. Garmin has moved the earnings call to Monday, February 23, 2009 at 11:00 a.m. Eastern. Details regarding the call and webcast are available under the heading “Earnings Call Information.”

Fourth Quarter 2008 Financial Summary:

-- Total revenue of $1.048 billion, down 14% from $1.217 billion in fourth quarter 2007
-- Automotive/Mobile segment revenue decreased 17% to $828 million in fourth quarter 2008
-- Outdoor/Fitness segment revenue increased 5% to $120 million in fourth quarter 2008
-- Aviation segment revenue decreased 5% to $67 million in fourth quarter 2008
-- Marine segment revenue was flat at $33 million in fourth quarter 2008
-- All geographies slowed as poor economic conditions weighed on the business:
-- North America revenue was $761 million compared to $836 million, down 9%

-- Europe revenue was $251 million compared to $338 million, down 26%
-- Asia revenue was $36 million compared to $43 million, down 17%
-- Healthy gross margin of 41.1% compared to 44.3% in third quarter 2008 and 41.8% in fourth quarter 2007
-- Operating margin of 22.6% compared to 24.6% in third quarter 2008 and 25.7% in fourth quarter of 2007
-- Effective tax rate was 22.8% compared to 11.7% in fourth quarter 2007 resulting in a negative EPS impact of $0.11
-- Diluted earnings per share of $0.78 compared to $1.39 in fourth quarter 2007; excluding foreign exchange, EPS was $0.93 compared to $1.31 in the same quarter in 2007
-- Generated $340 million of free cash flow in the fourth quarter for a cash and marketable securities balance of just over $973 million
-- Significant inventory reduction from third quarter 2008 of $274 million resulting in year-end 2008 inventory of $425 million.
Fiscal Year 2008 Financial Summary:

-- Total revenue of $3.49 billion, up 10% from $3.18 billion in 2007
-- Automotive/Mobile segment revenue increased 8% to $2.54 billion in 2008
-- Outdoor/Fitness segment revenue increased 26% to $428 million in 2008
-- Aviation segment revenue increased 10% to $323 million in 2008
-- Marine segment revenue increased 1% to $204 million in 2008
-- All geographic areas experienced growth:
-- North America revenue was $2.34 billion compared to $2.07 billion, up 13%
-- Europe revenue was $1.01 billion compared to $969 million, up 5%
-- Asia revenue was $145 million compared to $144 million, up 1%
-- Solid 44.5% gross margin and 24.7% operating margin for the full year were better than expected
-- Generated $743 million of free cash flow with a debt-free balance sheet
-- Effective tax rate was 19.9% compared to 12.6% in 2007 resulting in a negative EPS impact of $0.31
-- Diluted earnings per share of $3.48 compared to $3.89 in 2007; excluding foreign exchange, EPS decreased 3% to $3.69 from $3.80 in 2007. Fiscal year EPS includes $0.27 related to a gain of $72 million from the sale and tender of our Tele Atlas N.V. shares.

Business highlights:

Achieved full year revenue growth in all four segments on the strength of new products and continued market share gains.

Sold 6.4 million units in the fourth quarter of 2008, up 15% from the same quarter in 2007; 16.9 million units sold in the fiscal year, an increase of 38% from 2007.

Achieved significant inventory reduction of $274 million demonstrating the agility of our supply chain and scalability of our business.

Introduced nüMaps™ Lifetime and ecoRoute™ for our PND customers allowing for lifetime quarterly map updates for a single fee and a fuel conservation software update for free.

Introduced the GPSMAP® 695 and 696, portable aviation navigation devices, incorporating new capabilities such as airways, electronic charts and expanded weather on a screen that is three times larger than its predecessor.

Introduced new marine products including the GHP™ 10 Autopilot and the next generation of BlueChart® g2 technology allowing us to further solidify our technology leadership in this segment.

Completed the acquisition of our Swedish distributor bringing the total to ten European distributors acquired. These acquisitions have helped us achieve market share gains and operating efficiencies in Europe.
Repurchased 2.4 million common shares in the fourth quarter.

Executive overview from Dr. Min Kao, Chairman and Chief Executive Officer:

“A significant highlight for 2008 is our gross margin performance of 44.5% which is down just 150 basis points from 2007. We also achieved a strong operating margin of 24.7% which exceeded our earlier expectations. Throughout 2008, we maintained our strong cash position with free cash flow generation of $743 million which was enhanced by the significant reduction in inventory during the quarter. This cash flow allowed us to fund our stock repurchase plan, pay a $0.75 per share dividend, and remain a debt-free company.


Overall amazing results IMHPO

Comments

  • Boyd 1998 Points
    I really haven't followed their fortunes recently. But it looks like they've done poorly over the past year when compared to the NASDAQ and the other indexes:

    image

    Good case of "buy the products and not the company"? Or maybe a buying opportunity at this level? Let me know if that works out, I am not putting any money into tech stocks at the moment. :)
  • gatorguy 326 Points
    IMO, it may be a buying opportunity. The daily close has pretty much mirrored the Nasdeq, which says to me that little attention is being paid to that particular stock, rather just Nasdeq movement overall. Any companies that are holding their own in this economy bear a close look.
  • gatorguy 326 Points
    Looks like a "few" others thought they might be a good stock to look at. Price up nearly 8% yesterday on the better than expected results, bucking a steep decline in the rest of the market.
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