Asia PR News

CAYMAN ISLANDS, Oct. 31 /PRNewswire-AsiaNet/ –

Garmin Ltd. (Nasdaq: GRMN) today announced a record quarter ended September
29, 2007.

Third Quarter 2007 Financial highlights:
— Total revenue of $729 million, up 79% from $408 million in third
quarter 2006
— Automotive/Mobile segment revenue increased 118% to $519 million in
third quarter 2007
— Aviation segment revenue increased 27% to $74 million in third quarter
2007
— Outdoor/Fitness segment revenue increased 24% to $88 million in third
quarter 2007
— Marine segment revenue increased 17% to $48 million in third quarter
2007
— All geographic areas experienced significant growth:
- North America revenue was $454 million compared to $265 million, up
71%
- Europe revenue was $227 million compared to $120 million, up 89%
- Asia revenue was $48 million compared to $23 million, up 109%
— Revenue from our automotive/mobile segment continued to become a larger
portion of total company revenues when compared with the same quarter
in 2006, at 71% of total revenues.
— Diluted earnings per share increased 57% to $0.88 from $0.56 in third
quarter 2006; excluding foreign exchange, EPS increased 78% to $0.89
from $0.50 in the same quarter in 2006.

Year-to-Date 2007 Financial highlights:
— Total revenue of $1.96 billion, up 69% from $1.16 billion year-to-date
2006
— Automotive/Mobile segment revenue increased 109% to $1.34 billion in
year-to-date 2007
— Aviation segment revenue increased 30% to $224 million in year-to-date
2007
— Outdoor/Fitness segment revenue increased 10% to $225 million in year-
to-date 2007
— Marine segment revenue increased 21% to $170 million in year-to-date
2007
— All geographic areas experienced significant growth:
- North America revenue was $1.23 billion compared to $700 million, up
76%
- Europe revenue was $631 million compared to $400 million, up 58%
- Asia revenue was $101 million compared to $63 million, up 60%
— Diluted earnings per share increased 64% to $2.50 from $1.52 in year-
to-date 2006; excluding foreign exchange, EPS increased 68% to $2.48
from $1.48 in the same period in 2006.

Business highlights:
— Strong sales in our automotive/mobile segment continue to exceed our
expectations and drive our increased guidance for the remainder of
2007.
— Aviation and marine segment results put them on track to meet or exceed
earlier full year guidance for these segments. Given improving sales
in our outdoor/fitness segment, we continue to anticipate this segment
will reach our full year guidance with seasonally strong holiday sales.
— 2.69 million units sold in the third quarter of 2007, up 119% from the
same quarter in 2006; year-to-date units sold increased 97% from the
same period in 2006.
— Completed the initial build-out of our third Taiwan manufacturing
facility, increasing the number of production lines from 31 to 37, and
production capacity at the end of the third quarter to an annual run
rate of approximately 16 million units. Expansion of our R&D and
other office space in Taiwan continues.
— Expansion of our North American warehouse in Olathe, Kansas continues,
with expected completion in Q1 2008.
— We continued to work to increase our retail penetration and broaden our
distribution as retailers laid the groundwork for the upcoming holiday
selling season. Our initial order book for the holiday season is
strong, as PNDs are positioned to be a popular item during the holiday
season.
— Due diligence work continues on previously announced acquisitions of
distributors in Spain, Italy, and Denmark. These activities are part
of our ongoing efforts to improve our market share in Europe.

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Executive overview from Dr. Min Kao, Chairman and Chief Executive Officer:
"Garmin experienced a solid third quarter. Our continued strong growth in
the automotive/mobile segment demonstrated that our products are well-
positioned to take advantage of the growing interest in portable navigation
devices. Independent market research indicates we have maintained a strong
leadership position in North America with approximately fifty percent PND
market share, and our market position in Europe continues to improve as well.

As we head into the holiday season, we believe we are prepared to meet the
growing demand for our products. We have increased our manufacturing
capacity and grown total inventories over $200 million since the end of the
second quarter of 2007. Our order book is strong, and we believe our
strategy of extensive market segmentation using both our popular nuvi(TM) and
c-series product offerings will drive positive results. Useful content and
competitive features integrated into reliable, easy-to-use products at
attractive price points are what customers want - and what they receive when
they choose Garmin.

Our aviation segment continued to grow steadily during the quarter.
Positive response to our WAAS and GMX200 product offerings and growth in the
sale of our G1000 cockpit continued. In the third quarter we announced
additional wins for our G1000 cockpit for future Cessna Caravan, Socata TBM
850 as well as the new PiperJet and a G1000 retrofit for the King Air
200/B200. Also during the 3rd quarter, Cessna announced that our new G300
cockpit display system was selected for its new Skycatcher light sport
aircraft. We continue to believe the aviation segment is positioned to meet
our 2007 guidance for this segment.

Our marine segment also showed steady growth, as customer interest in our
revolutionary new marine products and cartography continued to drive revenues
for the quarter. While typical marine segment revenues decline sequentially
in third and fourth quarter each year, results remain seasonally strong. We
continue to believe the marine segment is positioned to meet our 2007
guidance.

Third quarter revenue for our outdoor/fitness segment was strong compared
to the year ago quarter. Increased sales generated by the new Astro dog
tracking product, as well as new eTrex and Rino products with high-sensitivity
GPS drove this growth. We see continued growth opportunities for this segment
and believe the outdoor/fitness segment is positioned to meet our 2007
guidance for the segment."

Financial overview from Kevin Rauckman, Chief Financial Officer:
"Our financial results for the third quarter were strong and in line with
our expectations. Our retail orders are strong, and we look forward to a
solid 2007 holiday season," said Kevin Rauckman, chief financial officer of
Garmin Ltd. "Our revenue and earnings per share during the quarter grew 79%
and 57% respectively, exceeding our expectations. Excluding the impact of
foreign exchange, EPS for the quarter grew 78%, from $0.50 to $0.89.

Gross margin for the overall business declined modestly in the third
quarter, down 180 basis points from the year-ago quarter. The
automotive/mobile segment gross margin improved 70 basis points during the
quarter due to a seasonal, favorable product mix shift towards higher-margin
North American product, and PND pricing declined more slowly than we expected.
The aviation segment also improved 180 basis points as a function of favorable
product mix. Gross margin for the marine segment declined 50 basis points
during the quarter when compared to the year-ago quarter as a function of
product mix, and the outdoor/fitness segments declined 320 basis points,
reflecting a product mix shift and the transition of the eTrex product line.

Operating margin remained relatively stable, declining just 30 basis
points from the year-ago quarter. This stability reflected an anticipated
decline in gross margin offset by operating leverage as revenues outpaced
increased spending in advertising and research and development expenses during
the quarter. While we are pleased with these results, we anticipate more
significant margin compression during the fourth quarter of 2007.
We also generated $117 million of free cash flow in the third quarter of
2007, resulting in a cash and marketable securities balance of $1.03 billion
at the end of the quarter."

Fiscal 2007 Outlook
We remain optimistic about the future success of our business and our
ability to serve customers and distributors around the world. With this in
mind, we are updating our guidance as follows:

— We anticipate overall revenue to exceed $2.9 billion in 2007, and
earnings per share to exceed $3.40.
— We anticipate segment revenue growth rates for our automotive/mobile,
aviation, marine, and outdoor/fitness segments to be 90%, 30%, 20%, and
10%, respectively
— We anticipate operating margins to be approximately 27% for the full
year 2007
— Our effective tax rate should remain approximately 13%

Announcement of Management Appointment
Given our anticipated ongoing business growth, Cliff Pemble will be
assuming the new positions of Chief Operating Officer (COO) and President of
Garmin Ltd. In addition, he will assume direct supervision of all North
American Garmin subsidiaries, including Garmin AT, Dynastream, and Digital
Cyclone. Dr. Kao will continue in his role as Chairman and CEO of Garmin
Ltd. but will now be able to devote more time to business development,
strategic planning, and the development of our Asia-Pacific business
initiatives.

Announcement of Intent to Make an Offer to Acquire all the Outstanding
Shares in Tele Atlas N.V.
Early this morning we announced our intention to make an offer to acquire
all the outstanding shares in Tele Atlas N.V. Garmin has established itself
as a leader in navigation technology by consistently delivering award-winning,
reliable, easy to use products with rich content and competitive features at
attractive prices. This acquisition is consistent with our vision as a
leader in our market and our vertical integration strategy. Advanced mapping
data is an essential ingredient for the continued growth of the navigation
industry and this acquisition provides a means for Garmin to contribute more
broadly to the development and growth of this market. We will discuss this
important announcement more fully on our earnings call this morning.

Non-GAAP Measures

Net income (earnings) per share, excluding foreign currency
Management believes that net income per share before the impact of foreign
currency translation gain or loss is an important measure. The majority of
the company’s consolidated foreign currency translation gain or loss results
from translation into New Taiwan dollars at the end of each reporting period
of the significant cash and marketable securities, receivables and payables
held in U.S. dollars by the company’s Taiwan subsidiary. Such translation is
required under GAAP because the functional currency of this subsidiary is New
Taiwan dollars. However, there is minimal cash impact from such foreign
currency translation and management expects that the Taiwan subsidiary will
continue to hold the majority of its cash, cash equivalents and marketable
securities in U.S. dollars. Accordingly, earnings per share before the impact
of foreign currency translation gain or loss allows an assessment of the
company’s operating performance before the non-cash impact of the position of
the U.S. dollar versus the New Taiwan dollar, which permits a consistent
comparison of results between periods.
The following table contains a reconciliation of GAAP net income per share
to net income per share excluding the impact of foreign currency translation
gain or loss.

Garmin Ltd. And Subsidiaries
Net income per share, excluding FX
(in thousands, except per share information)

13-Weeks Ended 39-weeks Ended
September 29, September 30, September 29, September 30,
2007 2006 2007 2006

Net Income (GAAP) $193,507 $122,978 $547,744 $333,778
Foreign currency
(gain) / loss,
net of tax
effects $3,151 ($12,569) ($3,036) ($8,776)
Net income,
excluding FX $196,658 $110,409 $544,708 $325,002

Net income per share (GAAP):
Basic $0.89 $0.57 $2.53 $1.54
Diluted $0.88 $0.56 $2.50 $1.52

Net income per share, excluding FX:
Basic $0.91 $0.51 $2.52 $1.50
Diluted $0.89 $0.50 $2.48 $1.48

Weighted average common shares outstanding:
Basic 216,773 216,317 216,456 216,502
Diluted 220,644 218,866 219,482 218,878

Free cash flow
Management believes that free cash flow is an important financial measure
because it represents the amount of cash provided by operations that is
available for investing and defines it as operating cash flow less capital
expenditures for property and equipment.
The following table contains a reconciliation of GAAP net cash provided by
operating activities to free cash flow.

Garmin Ltd. And Subsidiaries
Free Cash Flow
(in thousands)

13-Weeks Ended 39-Weeks Ended
September 29, September 30, September 29, September 30,
2007 2006 2007 2006

Net cash provided
by operating
activities $133,766 $116,750 $555,905 $249,125
Less: purchases
of property and
equipment ($16,873) ($18,865) ($128,893) ($45,476)
Free Cash Flow $116,893 $97,885 $427,012 $203,649

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

When: Wednesday, October 31, 2007 at 11:00 a.m. Eastern
Where: http://www.garmin.com/aboutGarmin/invRelations/irCalendar.html
How: Simply log on to the web at the address above or call to listen
in at 800-883-9537.
Contact: investor.relations@garmin.com

A phone recording will be available for five business days following the
earnings call and can be accessed by dialing 800-642-1687 or (706) 645-9291
and utilizing the access code 19218207. An archive of the live webcast will
be available until November 30, 2007 on the Garmin website at
http://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. Any statements regarding the
company’s estimated earnings and revenue for fiscal 2007, the Company’s
expected segment revenue growth rate, margins, the number of new products to
be introduced in 2007 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 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, 2006 filed by Garmin with the Securities and Exchange
Commission (Commission file number 0-31983). A copy of Garmin’s 2006 Form
10-K can be downloaded from
http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

Through its operating subsidiaries, Garmin Ltd. designs, manufactures, and
markets navigation, communications and information devices, most of which are
enabled by GPS technology. Garmin is a leader in the general aviation and
consumer markets and its products serve aviation, marine, outdoor, fitness,
automotive, mobile and OEM applications. Garmin Ltd. is incorporated in the
Cayman Islands, and its principal subsidiaries are located in the United
States, Taiwan and United Kingdom. For more information, visit the investor
relations site of Garmin Ltd. at www.garmin.com or contact the Investor
Relations department at 913-397-8200. Garmin and Forerunner are registered
trademarks, and Edge is a trademark of Garmin Ltd. or its subsidiaries.

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

September 29, December 30,
2007 2006
Assets
Current assets:
Cash and cash equivalents $703,749 $337,321
Marketable securities 58,668 73,033
Accounts receivable, net 520,538 403,524
Inventories, net 493,739 271,008
Deferred income taxes 57,700 55,996
Prepaid expenses and other current assets 23,538 28,202

Total current assets 1,857,932 1,169,084

Property and equipment, net 358,578 250,988

Marketable securities 263,735 407,843
Restricted cash 1,580 1,525
Licensing agreements, net 14,398 3,307
Other intangible assets, net 149,277 64,273

Total assets $2,645,500 $1,897,020

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $236,044 $88,375
Salaries and benefits payable 32,524 16,268
Warranty reserve 55,225 37,639
Other accrued expenses 209,136 100,732
Income taxes payable 35,033 94,668

Total current liabilities 567,962 337,682

Long-term debt, less current portion 603 248
Deferred income taxes 1,219 1,191
Other liabilities 90,505 -

Stockholders’ equity:
Common stock 1,086 1,082
Additional paid-in capital 123,025 83,438
Retained earnings 1,863,867 1,478,654
Accumulated other comprehensive loss (2,767) (5,275)

Total stockholders’ equity 1,985,211 1,557,899
Total liabilities and stockholders’ equity $2,645,500 $1,897,020

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

13-Weeks Ended 39-Weeks Ended
September 29, September 30, September 29, September 30,
2007 2006 2007 2006

Net sales $728,673 $407,997 $1,963,298 $1,162,776

Cost of goods sold 386,822 209,137 1,009,028 584,843

Gross profit 341,851 198,860 954,270 577,933

Selling, general and
administrative
expenses 87,060 47,489 248,358 140,167
Research and development
expense 40,634 30,399 111,863 82,105
127,694 77,888 360,221 222,272

Operating income 214,157 120,972 594,049 355,661

Other income (expense):
Interest income 11,798 9,622 31,997 25,464
Interest expense (273) (2) (328) (14)
Foreign currency (3,626) 14,874 3,493 10,386
Other 570 70 959 3,507
8,469 24,564 36,121 39,343

Income before income
taxes 222,626 145,536 630,170 395,004

Income tax provision 29,119 22,558 82,426 61,226

Net income $193,507 $122,978 $547,744 $333,778

Net income per share:
Basic $0.89 $0.57 $2.53 $1.54
Diluted $0.88 $0.56 $2.50 $1.52

Weighted average common
shares outstanding:
Basic 216,773 216,317 216,456 216,502
Diluted 220,644 218,866 219,482 218,878

Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

39-Weeks Ended
September 29, September 30,
2007 2006
Operating Activities:
Net income $547,744 $333,778
Adjustments to reconcile net income
to net cash
provided by operating activities:
Depreciation 22,786 15,447
Amortization 18,803 19,844
Loss (gain) on sale of property
and equipment 71 (8)
Provision for doubtful accounts 3,467 796
Deferred income taxes (1,157) (29,867)
Foreign currency transaction
gains/losses 3,232 (19,724)
Provision for obsolete and slow
moving inventories 21,502 15,260
Stock compensation expense 8,830 8,378
Realized gains on marketable
securities - (3,852)
Changes in operating assets and
liabilities:
Accounts receivable (90,497) (79,648)
Inventories (234,920) (148,891)
Other current assets 4,510 (1,192)
Accounts payable 117,034 48,720
Other current and non-current
liabilities 147,608 69,704
Income taxes 9,486 22,866
Purchase of licenses (22,594) (2,486)
Net cash provided by operating
activities 555,905 249,125

Investing activities:
Purchases of property and equipment (128,893) (45,476)
Purchase of intangible assets (2,481) (1,513)
Purchase of marketable securities (983,716) (348,621)
Redemption of marketable securities 1,141,431 197,008
Change in restricted cash (56) (104)
Proceeds from asset sale 4 75
Net cash paid for acquisition of
businesses and other intangibles (84,126)
-
Net cash used in investing activities (57,837) (198,631)

Financing activities:
Proceeds from issuance of common
stock 15,358 10,042
Dividends (162,531)
-
Stock repurchase - (50,451)
Payments on long term debt (218)
-
Tax benefit related to stock option
exercise 15,776 7,453
Net cash used in financing activities (131,615) (32,956)

Effect of exchange rate changes on
cash and cash equivalents (25) (167)

Net increase in cash and cash
equivalents 366,428 17,371
Cash and cash equivalents at
beginning of period 337,321 334,352
Cash and cash equivalents at end of
period $703,749 $351,723

Garmin Ltd. And Subsidiaries
Revenue, Gross Profit, and Operating Income by Segment (Unaudited)

Reporting Segments
Outdoor/ Auto/
Fitness Marine Mobile Aviation Total

13-Weeks Ended
September 29, 2007

Net sales $87,747 $47,659 $518,939 $74,328 $728,673
Gross profit $46,553 $25,170 $221,148 $48,980 $341,851
Operating income $30,178 $15,623 $141,855 $26,501 $214,157

13-Weeks Ended
September 30, 2006

Net sales $70,651 $40,588 $237,981 $58,777 $407,997
Gross profit $39,803 $21,645 $99,708 $37,704 $198,860
Operating income $28,817 $13,659 $59,517 $18,979 $120,972

39-Weeks Ended
September 29, 2007

Net sales $225,437 $170,433 $1,343,460 $223,968 $1,963,298
Gross profit $123,616 $92,704 $591,400 $146,550 $954,270
Operating income $79,986 $60,033 $370,448 $83,582 $594,049

39-Weeks Ended
September 30, 2006

Net sales $205,412 $141,406 $644,097 $171,861 $1,162,776
Gross profit $118,615 $79,484 $269,855 $109,979 $577,933
Operating income $85,116 $53,718 $155,782 $61,045 $355,661

SOURCE Garmin Ltd.

/CONTACT: INVESTOR CONTACT: Polly Schwerdt, +1-913-397-8200,
investor.relations@garmin.com, or MEDIA CONTACT: Ted Gartner, +1-913-397-8200,
media.relations@garmin.com, both of Garmin Ltd./
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(GRMN)