Company reports record full year revenue,
proposes dividend increase, and announces share
repurchase program
SCHAFFHAUSEN, Switzerland, Feb. 21,
2024 /PRNewswire/ -- Garmin® Ltd.
(NYSE: GRMN), today announced results for the fourth quarter ended
December 30, 2023.
Highlights for fourth quarter 2023 include:
- Consolidated revenue of $1.48
billion, a 13% increase compared to the prior year
quarter
- Gross margin expanded to 58.3% from 57.0% in the prior year
quarter
- Operating margin was 23.0% compared to 20.5% in the prior year
quarter
- Operating income was $340
million, a 27% increase compared to the prior year
quarter
- GAAP EPS of $2.82 and pro forma
EPS(1) of $1.72,
representing 27% growth in pro forma EPS over the prior year
quarter
- Received six Innovation Awards at the 2024 Consumer Electronics
Show for our Venu® 3, epixTM Pro,
MARQ® Golfer-Carbon Edition and Garmin's Autoland
retrofit
- Launched the Descent TM G1 Solar-Ocean Edition, our
first-ever product made with recycled ocean-bound plastics
- G3000® Integrated Flight Deck was selected by Eve
Air Mobility for its electric vertical takeoff and landing
aircraft
- Force® Kraken was selected for a Marine Power
Innovation Award by the editors at Boating Magazine
- Awarded a multi-year Auto OEM contract that expands our
customer base within domain controllers with production starting in
2027
- Garmin ranked No. 1 for the 20th consecutive year in
Professional Pilot's 2024 Avionics Manufacturers Product Support
Survey
- Garmin ranked No. 2 on Forbes' 2024 list of America's Best
Large Employers
Highlights for fiscal year 2023 include:
- Record consolidated revenue of $5.23 billion, an 8% increase compared
to the prior year
- Aviation, Marine and Auto OEM segments each posted record full
year revenue
- Gross margin of 57.5% compared to 57.7% in the prior
year
- Operating margin of 20.9% compared to 21.1% in the
prior year
- Operating income of $1.09 billion, a
6% increase compared to the prior year
- GAAP EPS of $6.71 and pro
forma EPS(1) of $5.59,
representing 9% growth in pro forma EPS over the prior year
(In thousands, except
per share information)
|
|
13-Weeks
Ended
|
|
|
14-Weeks
Ended
|
|
|
|
|
|
|
52-Weeks
Ended
|
|
|
53-Weeks
Ended
|
|
|
|
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
YoY
|
|
|
December 30,
|
|
|
December 31,
|
|
|
YoY
|
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
Net sales
|
|
$
|
1,482,501
|
|
|
$
|
1,306,356
|
|
|
|
13
|
%
|
|
$
|
5,228,252
|
|
|
$
|
4,860,286
|
|
|
|
8
|
%
|
Fitness
|
|
|
412,076
|
|
|
|
336,553
|
|
|
|
22
|
%
|
|
|
1,344,637
|
|
|
|
1,109,419
|
|
|
|
21
|
%
|
Outdoor
|
|
|
486,378
|
|
|
|
451,465
|
|
|
|
8
|
%
|
|
|
1,697,151
|
|
|
|
1,770,275
|
|
|
|
(4)
|
%
|
Aviation
|
|
|
217,134
|
|
|
|
225,251
|
|
|
|
(4)
|
%
|
|
|
846,329
|
|
|
|
792,799
|
|
|
|
7
|
%
|
Marine
|
|
|
239,886
|
|
|
|
210,614
|
|
|
|
14
|
%
|
|
|
916,911
|
|
|
|
903,983
|
|
|
|
1
|
%
|
Auto OEM
|
|
|
127,027
|
|
|
|
82,473
|
|
|
|
54
|
%
|
|
|
423,224
|
|
|
|
283,810
|
|
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
%
|
|
|
58.3
|
%
|
|
|
57.0
|
%
|
|
|
|
|
|
|
57.5
|
%
|
|
|
57.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
%
|
|
|
23.0
|
%
|
|
|
20.5
|
%
|
|
|
|
|
|
|
20.9
|
%
|
|
|
21.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted
EPS
|
|
$
|
2.82
|
|
|
$
|
1.53
|
|
|
|
84
|
%
|
|
$
|
6.71
|
|
|
$
|
5.04
|
|
|
|
33
|
%
|
Pro forma diluted EPS
(1)
|
|
$
|
1.72
|
|
|
$
|
1.35
|
|
|
|
27
|
%
|
|
$
|
5.59
|
|
|
$
|
5.13
|
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See attached
Non-GAAP Financial Information for discussion and reconciliation of
non-GAAP financial measures, including pro forma diluted
EPS
|
|
Executive Overview from Cliff
Pemble, President and Chief Executive Officer:
"We are very pleased with our 2023 financial performance
resulting in record full year consolidated revenue and record full
year revenue in three of our five segments. We are entering 2024
with strong momentum from our robust product lineup and have many
product launches planned during the year. I am very proud of what
we accomplished in 2023 and look forward to all that 2024 will
bring." - Cliff Pemble, President
and Chief Executive Officer of Garmin Ltd.
Fitness:
Revenue from the fitness segment increased 22% in the
fourth quarter with growth across all categories led by strong
demand for wearables. Gross and operating margins were 56% and 22%,
respectively, resulting in $93 million of operating income. At
the recent Consumer Electronics Show, our Venu 3 was recognized
with three CES Innovation Awards, including the prestigious Best of
Innovation honor for outstanding design and engineering.
Outdoor:
Revenue from the outdoor segment increased 8% in the fourth
quarter with growth across multiple categories led by adventure
watches. Gross and operating margins were 65% and 34%,
respectively, resulting in $164 million of operating income.
During the quarter, we expanded our lineup of dive offerings with
the introduction of the Descent G1 Solar – Ocean Edition, our
first-ever product made with recycled ocean-bound plastics. We also
launched the new Descent Mk3 watch-style dive computer and the
Descent T2 transceiver with enhanced SubWave TM
sonar technology. This enhanced underwater technology features
diver-to-diver messaging and tank pressure monitoring. Also during
the quarter, we launched the eTrex® Solar, our first handheld
GPS with solar charging capability allowing for infinite battery
life for outdoor adventurers.
Aviation:
Revenue from the aviation segment decreased 4% in the
fourth quarter as growth in OEM categories was more than offset by
decreases in aftermarket categories. Gross and operating margins
were 75% and 26%, respectively, resulting in $57 million
of operating income. During the quarter, our G3000 integrated
flight deck was selected by Embraer backed Eve Air Mobility for its
electric vertical takeoff and landing aircraft. The G3000's
lightweight, high-resolution displays and intuitive touchscreen
interface are ideally suited for both legacy aircraft and emerging
advanced air mobility applications.
Marine:
Revenue from the marine segment increased 14% in the fourth
quarter due to contributions from the acquisition of JL Audio.
Gross and operating margins were 53% and 16%, respectively,
resulting in $37 million of operating income. During the
quarter, we launched the ECHOMAP TM Ultra 2
chartplotter series designed with premium sonar, mapping and
wireless networking capabilities for inland and nearshore anglers.
We also launched the GSD 28 sonar module with RapidReturn
technology that offers six times faster updates than its
predecessor.
Auto OEM:
Revenue from the auto OEM segment increased 54% during the
fourth quarter primarily due to increased shipments of domain
controllers. Gross margin was 21%, and the operating loss narrowed
to $10 million. Domain controller deliveries to the BMW Group
continued to ramp up across multiple models and regions. During the
quarter, we were awarded a multi-year contract with a premium
automaker to supply domain controllers on a global basis starting
in 2027, which is projected to be the single largest award in the
history of our Auto OEM business. In addition, at the recent
Consumer Electronics Show, we revealed our updated Unified Cabin
and announced our motorcycle infotainment solution was selected by
Yamaha Motors for select motorcycles and smart scooters.
Additional Financial Information:
Total operating expenses in the fourth quarter were $524 million, a 10% increase over the prior year.
Research and development increased 10% primarily due to engineering
personnel costs. Selling, general and administrative expenses
increased 10% driven primarily by personnel related expenses and
incremental costs associated with the acquisition of JL Audio.
Advertising expenses increased 6% primarily due to higher
cooperative advertising.
In the fourth quarter of 2023, we reported a $159 million income tax benefit. Excluding
$181 million of income tax benefit
due to the revaluation of certain Switzerland deferred tax assets, and
$12 million of income tax benefit due
to auto OEM manufacturing tax incentives in Poland, our pro forma effective tax
rate(1) in the fourth quarter of 2023 was
9.0% compared to 8.9% in the prior year quarter.
In the fourth quarter of 2023, we generated operating cash flow
of $466 million and free cash
flow(1) of $417
million. We paid a quarterly dividend of approximately
$140 million and repurchased
approximately $19 million of the
Company's shares within the quarter, completing the share
repurchase program authorized through December 29, 2023. We ended the quarter with cash
and marketable securities of approximately $3.1 billion.
(1)
|
See attached Non-GAAP
Financial Information for discussion and reconciliation of non-GAAP
financial measures, including pro forma effective tax rate and free
cash flow.
|
2024 Fiscal Year Guidance(2):
We expect full year 2024 revenue of approximately $5.75 billion, an increase of approximately 10%
over 2023. We expect our full year pro forma EPS to be
approximately $5.40 based upon gross
margin of approximately 56.5%, operating margin of approximately
20.0% and pro forma effective tax rate of approximately 15.5%.
|
|
2024
Guidance
|
Revenue
|
|
$5.75B
|
Gross Margin
|
|
56.5 %
|
Operating
Margin
|
|
20.0 %
|
Pro forma Effective Tax
Rate
|
|
15.5 %
|
Pro forma
EPS
|
|
$5.40
|
|
|
(2)
|
All amounts and %'s in
the above 2024 Guidance table are approximate. Also, see attached
discussion on Forward-looking Financial Measures.
|
Dividend Recommendation and New Share Repurchase
Program:
The Board of Directors intends to recommend to the shareholders
for approval at the annual meeting to be held on June 7, 2024, a cash dividend in the amount of
$3.00 per share, payable in four
equal installments on dates to be determined by the Board. The
Board currently anticipates the scheduling of the dividend in four
installments as follows:
Dividend
Date
|
|
Record Date
|
|
Dividend
Per Share
|
June 28,
2024
|
|
June 17,
2024
|
|
$0.75
|
September 27,
2024
|
|
September 13,
2024
|
|
$0.75
|
December 27,
2024
|
|
December 13,
2024
|
|
$0.75
|
March 28,
2025
|
|
March 14,
2025
|
|
$0.75
|
In addition, the Board has established March 29, 2024 as the payment date and
March 15, 2024 as the record date for
the final dividend installment of $0.73 per share, per the prior approval at the
2023 annual shareholders' meeting. The first, second and third
payments of $0.73 per share were made
on June 30, 2023, September 29, 2023, and December 29, 2023, respectively.
On February 16, 2024, the Board of
Directors authorized the Company to repurchase up to $300 million of the Company's shares through
December 26, 2026. The timing and
volume of any share repurchases under this authorization will be
determined by management at its discretion. Share repurchases,
which are subject to market conditions, other business conditions
and applicable legal requirements, may be made from time to time in
the open market or in privately negotiated transactions, including
under plans complying with the provisions of
Rule 10b5-1 and Rule 10b-18 of
the Securities Exchange Act of 1934, as amended. The
share repurchase authorization does not obligate the Company to
repurchase any specific number of shares and may be suspended,
modified or terminated at any time.
Webcast Information/Forward-Looking Statements:
The information for Garmin Ltd.'s earnings call is as
follows:
When:
|
|
Wednesday, February 21,
2024 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
|
An archive of the live webcast will be available until
February 19, 2025 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 2024 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, share repurchase programs, currency movements,
expenses, pricing, new product launches, market reach, statements
relating to possible future dividends, 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 30,
2023 filed by Garmin with the Securities and Exchange
Commission (Commission file number 001-41118). A copy of
Garmin's 2023 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 30, 2023. 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, ECHOMAP, eTrex, Force, G3000, MARQ,
quatix, and venu are trademarks of Garmin Ltd. or its subsidiaries
and are registered in one or more countries, including the U.S.
Epix and Descent 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.
Investor Relations
Contact:
|
|
Media Relations
Contact:
|
Teri Seck
|
|
Krista Klaus
|
913/397-8200
|
|
913/397-8200
|
investor.relations@garmin.com
|
|
media.relations@garmin.com
|
|
|
|
|
Garmin Ltd. and
Subsidiaries
|
|
Condensed
Consolidated Statements of Income (Unaudited)
|
|
(In thousands,
except per share information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks
Ended
|
|
|
14-Weeks
Ended
|
|
|
52-Weeks
Ended
|
|
|
53-Weeks
Ended
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
December 30,
|
|
|
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net sales
|
|
$
|
1,482,501
|
|
|
$
|
1,306,356
|
|
|
$
|
5,228,252
|
|
|
$
|
4,860,286
|
|
Cost of goods
sold
|
|
|
618,352
|
|
|
|
561,386
|
|
|
|
2,223,297
|
|
|
|
2,053,511
|
|
Gross profit
|
|
|
864,149
|
|
|
|
744,970
|
|
|
|
3,004,955
|
|
|
|
2,806,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
expense
|
|
|
61,260
|
|
|
|
57,662
|
|
|
|
173,109
|
|
|
|
168,040
|
|
Selling, general and
administrative expenses
|
|
|
225,190
|
|
|
|
204,421
|
|
|
|
834,990
|
|
|
|
775,963
|
|
Research and
development expense
|
|
|
237,245
|
|
|
|
215,712
|
|
|
|
904,696
|
|
|
|
834,927
|
|
Total operating
expenses
|
|
|
523,695
|
|
|
|
477,795
|
|
|
|
1,912,795
|
|
|
|
1,778,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
340,454
|
|
|
|
267,175
|
|
|
|
1,092,160
|
|
|
|
1,027,845
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
22,840
|
|
|
|
14,306
|
|
|
|
77,302
|
|
|
|
40,826
|
|
Foreign currency gains
(losses)
|
|
|
19,488
|
|
|
|
44,535
|
|
|
|
26,434
|
|
|
|
(11,274)
|
|
Other
income
|
|
|
254
|
|
|
|
3,860
|
|
|
|
4,460
|
|
|
|
7,577
|
|
Total other income
(expense)
|
|
|
42,582
|
|
|
|
62,701
|
|
|
|
108,196
|
|
|
|
37,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
383,036
|
|
|
|
329,876
|
|
|
|
1,200,356
|
|
|
|
1,064,974
|
|
Income tax (benefit)
provision
|
|
|
(159,089)
|
|
|
|
36,604
|
|
|
|
(89,280)
|
|
|
|
91,389
|
|
Net income
|
|
$
|
542,125
|
|
|
$
|
293,272
|
|
|
$
|
1,289,636
|
|
|
$
|
973,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.83
|
|
|
$
|
1.53
|
|
|
$
|
6.74
|
|
|
$
|
5.06
|
|
Diluted
|
|
$
|
2.82
|
|
|
$
|
1.53
|
|
|
$
|
6.71
|
|
|
$
|
5.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
191,363
|
|
|
|
191,613
|
|
|
|
191,397
|
|
|
|
192,544
|
|
Diluted
|
|
|
192,557
|
|
|
|
192,104
|
|
|
|
192,058
|
|
|
|
193,042
|
|
Garmin Ltd. and
Subsidiaries
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 30,
2023
|
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,693,452
|
|
|
$
|
1,279,194
|
|
Marketable
securities
|
|
|
274,618
|
|
|
|
173,288
|
|
Accounts receivable,
net
|
|
|
815,243
|
|
|
|
656,847
|
|
Inventories
|
|
|
1,345,955
|
|
|
|
1,515,045
|
|
Deferred
costs
|
|
|
16,316
|
|
|
|
14,862
|
|
Prepaid expenses and
other current assets
|
|
|
318,556
|
|
|
|
315,915
|
|
Total current
assets
|
|
|
4,464,140
|
|
|
|
3,955,151
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
1,224,097
|
|
|
|
1,147,005
|
|
Operating lease
right-of-use assets
|
|
|
143,724
|
|
|
|
138,040
|
|
Noncurrent marketable
securities
|
|
|
1,125,191
|
|
|
|
1,208,360
|
|
Deferred income tax
assets
|
|
|
754,635
|
|
|
|
441,071
|
|
Noncurrent deferred
costs
|
|
|
11,057
|
|
|
|
9,831
|
|
Goodwill
|
|
|
608,474
|
|
|
|
567,994
|
|
Other intangible
assets, net
|
|
|
186,601
|
|
|
|
178,461
|
|
Other noncurrent
assets
|
|
|
85,650
|
|
|
|
85,257
|
|
Total assets
|
|
$
|
8,603,569
|
|
|
$
|
7,731,170
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
253,790
|
|
|
$
|
212,417
|
|
Salaries and benefits
payable
|
|
|
190,014
|
|
|
|
176,114
|
|
Accrued warranty
costs
|
|
|
55,738
|
|
|
|
50,952
|
|
Accrued sales program
costs
|
|
|
98,610
|
|
|
|
97,772
|
|
Other accrued
expenses
|
|
|
245,874
|
|
|
|
197,376
|
|
Deferred
revenue
|
|
|
101,189
|
|
|
|
91,092
|
|
Income taxes
payable
|
|
|
225,475
|
|
|
|
246,180
|
|
Dividend
payable
|
|
|
139,997
|
|
|
|
139,732
|
|
Total current
liabilities
|
|
|
1,310,687
|
|
|
|
1,211,635
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax
liabilities
|
|
|
114,682
|
|
|
|
129,965
|
|
Noncurrent income taxes
payable
|
|
|
16,521
|
|
|
|
34,627
|
|
Noncurrent deferred
revenue
|
|
|
36,148
|
|
|
|
35,702
|
|
Noncurrent operating
lease liabilities
|
|
|
113,035
|
|
|
|
114,541
|
|
Other noncurrent
liabilities
|
|
|
436
|
|
|
|
360
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Common shares (195,880
and 198,077 shares authorized and issued;
191,777
and 191,623 shares outstanding)
|
|
|
19,588
|
|
|
|
17,979
|
|
Additional paid-in
capital
|
|
|
2,125,467
|
|
|
|
2,042,472
|
|
Treasury shares (4,103
and 6,454 shares)
|
|
|
(330,909)
|
|
|
|
(475,095)
|
|
Retained
earnings
|
|
|
5,263,528
|
|
|
|
4,733,517
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(65,614)
|
|
|
|
(114,533)
|
|
Total
stockholders' equity
|
|
|
7,012,060
|
|
|
|
6,204,340
|
|
Total liabilities and
stockholders' equity
|
|
$
|
8,603,569
|
|
|
$
|
7,731,170
|
|
Garmin Ltd. and
Subsidiaries
|
|
Consolidated
Statements of Cash Flows (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
52-Weeks
Ended
|
|
|
53-Weeks
Ended
|
|
|
|
December 30,
2023
|
|
|
December 31,
2022
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,289,636
|
|
|
$
|
973,585
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
132,347
|
|
|
|
118,743
|
|
Amortization
|
|
|
45,225
|
|
|
|
45,110
|
|
Loss (gain) on sale of
property and equipment
|
|
|
215
|
|
|
|
(2,083)
|
|
Unrealized foreign
currency (gains) losses
|
|
|
(25,541)
|
|
|
|
(5,867)
|
|
Deferred income
taxes
|
|
|
(340,774)
|
|
|
|
(143,286)
|
|
Stock compensation
expense
|
|
|
101,422
|
|
|
|
76,801
|
|
Realized losses
(gains) on marketable securities
|
|
|
62
|
|
|
|
986
|
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
|
(129,120)
|
|
|
|
167,336
|
|
Inventories
|
|
|
244,506
|
|
|
|
(363,327)
|
|
Other current and
noncurrent assets
|
|
|
7,887
|
|
|
|
72,185
|
|
Accounts
payable
|
|
|
28,503
|
|
|
|
(131,268)
|
|
Other current and
noncurrent liabilities
|
|
|
52,188
|
|
|
|
(71,756)
|
|
Deferred
revenue
|
|
|
10,411
|
|
|
|
(2,379)
|
|
Deferred
costs
|
|
|
(2,661)
|
|
|
|
3,591
|
|
Income
taxes
|
|
|
(38,041)
|
|
|
|
49,888
|
|
Net cash provided by
operating activities
|
|
|
1,376,265
|
|
|
|
788,259
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(193,524)
|
|
|
|
(244,286)
|
|
Proceeds from sale of
property and equipment
|
|
|
218
|
|
|
|
2,402
|
|
Purchase of intangible
assets
|
|
|
(1,504)
|
|
|
|
(1,907)
|
|
Purchase of marketable
securities
|
|
|
(170,681)
|
|
|
|
(1,051,994)
|
|
Redemption of
marketable securities
|
|
|
183,372
|
|
|
|
1,164,116
|
|
Acquisitions, net of
cash acquired
|
|
|
(150,853)
|
|
|
|
(13,455)
|
|
Net cash used in
investing activities
|
|
|
(332,972)
|
|
|
|
(145,124)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
(558,769)
|
|
|
|
(679,096)
|
|
Proceeds from issuance
of treasury shares related to equity awards
|
|
|
44,063
|
|
|
|
62,221
|
|
Purchase of treasury
shares related to equity awards
|
|
|
(22,815)
|
|
|
|
(22,730)
|
|
Purchase of treasury
shares under share repurchase plan
|
|
|
(98,988)
|
|
|
|
(201,012)
|
|
Net cash used in
financing activities
|
|
|
(636,509)
|
|
|
|
(840,617)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
7,460
|
|
|
|
(21,449)
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents, and restricted cash
|
|
|
414,244
|
|
|
|
(218,931)
|
|
Cash, cash equivalents,
and restricted cash at beginning of year
|
|
|
1,279,912
|
|
|
|
1,498,843
|
|
Cash, cash equivalents,
and restricted cash at end of year
|
|
$
|
1,694,156
|
|
|
$
|
1,279,912
|
|
Garmin Ltd. and
Subsidiaries
|
Net Sales, Gross
Profit and Operating Income by Segment (Unaudited)
|
(In
thousands)
|
|
The Company announced
an organization realignment in January 2023, which combined the
consumer auto operating segment with the outdoor operating segment.
As a result, the Company's operating segments, which also represent
our reportable segments, are fitness, outdoor, aviation, marine,
and auto OEM. Results for the 13-week and 53-week periods
ended December 31, 2022 have been recast below to conform with
the current period presentation. This change had no effect on the
Company's consolidated results of operations.
|
|
|
|
Fitness
|
|
|
Outdoor
|
|
|
Aviation
|
|
|
Marine
|
|
|
Auto
OEM
|
|
|
Total
|
|
13-Weeks Ended
December 30, 2023
|
|
Net sales
|
|
$
|
412,076
|
|
|
$
|
486,378
|
|
|
$
|
217,134
|
|
|
$
|
239,886
|
|
|
$
|
127,027
|
|
|
$
|
1,482,501
|
|
Gross profit
|
|
|
232,147
|
|
|
|
317,061
|
|
|
|
162,214
|
|
|
|
126,099
|
|
|
|
26,628
|
|
|
|
864,149
|
|
Operating income
(loss)
|
|
|
92,550
|
|
|
|
163,855
|
|
|
|
56,671
|
|
|
|
37,294
|
|
|
|
(9,916)
|
|
|
|
340,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14-Weeks Ended
December 31, 2022
|
|
Net sales
|
|
$
|
336,553
|
|
|
$
|
451,465
|
|
|
$
|
225,251
|
|
|
$
|
210,614
|
|
|
$
|
82,473
|
|
|
$
|
1,306,356
|
|
Gross profit
|
|
|
164,496
|
|
|
|
280,031
|
|
|
|
159,858
|
|
|
|
114,723
|
|
|
|
25,862
|
|
|
|
744,970
|
|
Operating income
(loss)
|
|
|
39,844
|
|
|
|
134,152
|
|
|
|
62,829
|
|
|
|
42,853
|
|
|
|
(12,503)
|
|
|
|
267,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52-Weeks Ended
December 30, 2023
|
|
Net sales
|
|
$
|
1,344,637
|
|
|
$
|
1,697,151
|
|
|
$
|
846,329
|
|
|
$
|
916,911
|
|
|
$
|
423,224
|
|
|
$
|
5,228,252
|
|
Gross profit
|
|
|
716,906
|
|
|
|
1,072,861
|
|
|
|
625,988
|
|
|
|
491,261
|
|
|
|
97,939
|
|
|
|
3,004,955
|
|
Operating income
(loss)
|
|
|
232,201
|
|
|
|
515,254
|
|
|
|
226,400
|
|
|
|
179,429
|
|
|
|
(61,124)
|
|
|
|
1,092,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53-Weeks Ended
December 31, 2022
|
|
Net sales
|
|
$
|
1,109,419
|
|
|
$
|
1,770,275
|
|
|
$
|
792,799
|
|
|
$
|
903,983
|
|
|
$
|
283,810
|
|
|
$
|
4,860,286
|
|
Gross profit
|
|
|
552,417
|
|
|
|
1,099,408
|
|
|
|
573,063
|
|
|
|
491,457
|
|
|
|
90,430
|
|
|
|
2,806,775
|
|
Operating income
(loss)
|
|
|
104,738
|
|
|
|
573,281
|
|
|
|
213,186
|
|
|
|
215,304
|
|
|
|
(78,664)
|
|
|
|
1,027,845
|
|
Garmin Ltd. and
Subsidiaries
|
|
Net Sales by
Geography (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks
Ended
|
|
|
14-Weeks
Ended
|
|
|
|
|
|
|
52-Weeks
Ended
|
|
|
53-Weeks
Ended
|
|
|
|
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
YoY
|
|
|
December 30,
|
|
|
December 31,
|
|
|
YoY
|
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
Net sales
|
|
$
|
1,482,501
|
|
|
$
|
1,306,356
|
|
|
13 %
|
|
|
$
|
5,228,252
|
|
|
$
|
4,860,286
|
|
|
8 %
|
|
Americas
|
|
|
732,648
|
|
|
|
648,912
|
|
|
13 %
|
|
|
|
2,614,358
|
|
|
|
2,429,029
|
|
|
8 %
|
|
EMEA
|
|
|
523,439
|
|
|
|
440,747
|
|
|
19 %
|
|
|
|
1,775,965
|
|
|
|
1,633,640
|
|
|
9 %
|
|
APAC
|
|
|
226,414
|
|
|
|
216,697
|
|
|
4 %
|
|
|
|
837,929
|
|
|
|
797,617
|
|
|
5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA - Europe, Middle
East and Africa
|
|
APAC - Asia Pacific and
Australian Continent
|
|
Non-GAAP Financial Information
To supplement our financial results presented in accordance with
GAAP, this release includes the following measures defined by the
Securities and Exchange Commission as non-GAAP financial measures:
pro forma effective tax rate, pro forma net income (earnings) per
share and free cash flow. These non-GAAP measures are not based on
any comprehensive set of accounting rules or principles and should
not be considered a substitute for, or superior to, financial
measures calculated in accordance with GAAP, and may be different
from non-GAAP measures used by other companies, limiting the
usefulness of the measures for comparison with other companies.
Management believes providing investors with an operating view
consistent with how it manages the Company provides enhanced
transparency into the operating results of the Company, as
described in more detail by category below.
The tables below provide reconciliations between the GAAP and
non-GAAP measures.
Pro forma effective tax rate
The Company's income tax expense is periodically impacted by
discrete tax items that are not reflective of income tax expense
incurred as a result of current period earnings. Therefore,
management believes disclosure of the effective tax rate and income
tax provision before the effect of certain discrete tax items are
important measures to permit investors' consistent comparison
between periods.
(In
thousands)
|
|
13-Weeks
Ended
|
|
|
14-Weeks
Ended
|
|
|
52-Weeks
Ended
|
|
|
53-Weeks
Ended
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
December 30,
|
|
|
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
$
|
|
|
ETR(1)
|
|
|
$
|
|
|
ETR(1)
|
|
|
$
|
|
|
ETR(1)
|
|
|
$
|
|
|
ETR(1)
|
|
GAAP income tax
(benefit) provision
|
|
$
|
(159,089)
|
|
|
(41.5) %
|
|
|
$
|
36,604
|
|
|
11.1 %
|
|
|
$
|
(89,280)
|
|
|
(7.4) %
|
|
|
$
|
91,389
|
|
|
8.6 %
|
|
Pro forma discrete tax
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect of state
rate change (2)
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(2,269)
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
Switzerland deferred
tax assets (3)
|
|
|
181,410
|
|
|
|
|
|
|
|
(7,168)
|
|
|
|
|
|
|
|
181,410
|
|
|
|
|
|
|
|
(7,168)
|
|
|
|
|
|
Poland incentive tax
credits (4)
|
|
|
12,116
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
12,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma income tax
provision
|
|
$
|
34,437
|
|
|
9.0 %
|
|
|
$
|
29,436
|
|
|
8.9 %
|
|
|
$
|
101,977
|
|
|
8.5 %
|
|
|
$
|
84,221
|
|
|
7.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Effective tax rate
is calculated by taking the income tax (benefit) provision divided
by income before taxes, as presented on the face of the Condensed
Consolidated Statements of Income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) In third quarter
2023, the Company recognized $2.3 million of tax expense due to the
revaluation of deferred tax assets associated with the change in
corporate income tax rate for the state of Kansas.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Certain Switzerland
deferred tax assets related to the enactment of Switzerland Federal
and Schaffhausen cantonal tax reform were revalued in the fourth
quarters of 2023 and 2022, resulting in income tax benefit of
$181.4 million and income tax expense of $7.2 million,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) In fourth quarter
2023, the Company recognized $12.1 million of income tax benefit
due to auto OEM manufacturing tax incentives in Poland.
|
|
Pro forma net income (earnings) per share
Management believes that net income (earnings) per share before
the impact of foreign currency gains or losses and certain discrete
income tax items, as discussed above, is an important measure in
order to permit a consistent comparison of the Company's
performance between periods.
(In thousands, except
per share information)
|
|
13-Weeks
Ended
|
|
|
14-Weeks
Ended
|
|
|
52-Weeks
Ended
|
|
|
53-Weeks
Ended
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
December 30,
|
|
|
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
GAAP net
income
|
|
$
|
542,125
|
|
|
$
|
293,272
|
|
|
$
|
1,289,636
|
|
|
$
|
973,585
|
|
Foreign currency gains
/ losses (1)
|
|
|
(19,488)
|
|
|
|
(44,535)
|
|
|
|
(26,434)
|
|
|
|
11,274
|
|
Tax effect of foreign
currency gains / losses (2)
|
|
|
1,752
|
|
|
|
3,974
|
|
|
|
2,246
|
|
|
|
(892)
|
|
Pro forma discrete tax
items (3)
|
|
|
(193,526)
|
|
|
|
7,168
|
|
|
|
(191,257)
|
|
|
|
7,168
|
|
Pro forma net
income
|
|
$
|
330,863
|
|
|
$
|
259,879
|
|
|
$
|
1,074,191
|
|
|
$
|
991,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.83
|
|
|
$
|
1.53
|
|
|
$
|
6.74
|
|
|
$
|
5.06
|
|
Diluted
|
|
$
|
2.82
|
|
|
$
|
1.53
|
|
|
$
|
6.71
|
|
|
$
|
5.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.73
|
|
|
$
|
1.36
|
|
|
$
|
5.61
|
|
|
$
|
5.15
|
|
Diluted
|
|
$
|
1.72
|
|
|
$
|
1.35
|
|
|
$
|
5.59
|
|
|
$
|
5.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
191,363
|
|
|
|
191,613
|
|
|
|
191,397
|
|
|
|
192,544
|
|
Diluted
|
|
|
192,557
|
|
|
|
192,104
|
|
|
|
192,058
|
|
|
|
193,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Foreign currency
gains and losses for the Company are driven by movements of a
number of currencies in relation to the U.S. Dollar and the related
exchange rate impact on the significant cash, receivables, and
payables held in a currency other than the functional currency at a
given legal entity. However, there is minimal cash impact from such
foreign currency gains and losses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) The tax effect of
foreign currency gains and losses was calculated using the pro
forma effective tax rate of 9.0% and 8.5% for the 13-weeks and
fiscal year ended December 30, 2023, respectively, and the pro
forma effective tax rate of 8.9% and 7.9% for the 14-weeks and
fiscal year ended December 31, 2022, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The 2023 and 2022
discrete tax items are discussed in the pro forma effective tax
rate section above.
|
|
Free cash flow
Management believes that free cash flow is an important
liquidity measure because it represents the amount of cash provided
by operations that is available for investing and defines it as
operating cash flows less capital expenditures for property and
equipment. Management believes that excluding purchases of property
and equipment provides a better understanding of the underlying
trends in the Company's operations and allows more accurate
comparisons of the Company's results between periods. This metric
may also be useful to investors but should not be considered in
isolation as it is not a measure of cash flow available for
discretionary expenditures. The most comparable GAAP measure is net
cash provided by operating activities.
(In
thousands)
|
|
13-Weeks
Ended
|
|
|
14-Weeks
Ended
|
|
|
52-Weeks
Ended
|
|
|
53-Weeks
Ended
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
December 30,
|
|
|
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net cash provided by
operating activities
|
|
$
|
465,941
|
|
|
$
|
368,665
|
|
|
$
|
1,376,265
|
|
|
$
|
788,259
|
|
Less: purchases of
property and equipment
|
|
|
(48,648)
|
|
|
|
(59,358)
|
|
|
|
(193,524)
|
|
|
|
(244,286)
|
|
Free Cash
Flow
|
|
$
|
417,293
|
|
|
$
|
309,307
|
|
|
$
|
1,182,741
|
|
|
$
|
543,973
|
|
Forward-looking Financial Measures
The forward-looking financial measures in our 2024 guidance
provided above do not consider the potential future net effect of
foreign currency exchange gains and losses, certain discrete tax
items and any other impacts that may be identified as pro forma
adjustments in calculating the non-GAAP measures described
above.
The estimated impact of foreign currency gains and losses cannot
be reasonably estimated on a forward-looking basis due to the high
variability and low visibility with respect to non-operating
foreign currency exchange gains and losses and the related tax
effects of such gains and losses. The impact on diluted net income
per share of foreign currency gains and losses, net of tax effects,
was $0.13 per share for the 52 weeks
ended December 30, 2023.
At this time, management is unable to determine whether or not
significant discrete tax items will occur in fiscal 2024 or
anticipate the impact of any other events that may be considered in
the calculation of non-GAAP financial measures.
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multimedia:https://www.prnewswire.com/news-releases/garmin-announces-fourth-quarter-and-fiscal-year-2023-results-302067000.html
SOURCE Garmin Ltd.