SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
| Cayman Islands | 0-31983 | 98-0229227 | |||
| (State or other | (Commission | (I.R.S. Employer | |||
| jurisdiction | File Number) | Identification No.) | |||
| of incorporation) | |||||
P.O. Box 30464 SMB
5th Floor, Harbour Place
103 South Church Street
George Town, Grand Cayman, Cayman Islands
(Address of principal executive offices)
Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits. The following exhibit is furnished herewith.
| Exhibit No. | Description |
99 |
Press Release dated July 30, 2003 |
Item 12. Results of Operations and Financial Condition
On July 30, 2003, Garmin Ltd. issued a press release announcing its financial results for the fiscal second quarter ended June 28, 2003. A copy of this press release is attached as Exhibit 99.
The information in this report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 as amended, or otherwise subject to the liabilities of that Section.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GARMIN LTD. | |
| Date: July 24, 2003 | /s/ Andrew R. Etkind ---------------------------------------------------- Andrew R. Etkind General Counsel and Secretary |
| Exhibit No. | Description |
99 |
Press Release dated July 30, 2003 |
EXHIBIT 99
CAYMAN ISLANDS, July 30, 2003/PRNewswire/ — Garmin Ltd. (Nasdaq: GRMN — news) today announced record revenue and earnings for its second fiscal quarter ended June 28, 2003. Revenue for the quarter increased 17 percent to $143.5 million from $122.8 million in the year-ago quarter. Net income increased to $47.2 million, or $0.43 diluted earnings per share, compared to $32.1 million or $0.30 diluted earnings per share in the year-ago quarter. Second quarter net income included a $1.3 million foreign currency loss as a result of a weaker U.S. dollar compared to the Taiwan dollar. The diluted EPS of $0.43 recorded for the second quarter of 2003 was at the high end of company guidance of $0.40 to $0.43. Excluding the effects of foreign currency, diluted EPS for the quarter was $0.44 compared to $0.36 in the year-ago quarter.
“Demand for our products remains strong, spurred by growth in our automotive and recreational product lines. Consumer awareness of the utility of GPS navigation continues to expand and we have experienced growth in our core markets as a result,” said Dr. Min Kao, CEO of Garmin Ltd. The consumer segment recorded a 22 percent growth in revenues during this quarter and 24 percent year to date, with strength across most of our consumer product lines. The new iQue product, with deliveries starting last week, and the introduction of the StreetPilot 2610 and 2650 products have been received positively in the market.
Consumer revenue for the second quarter totaled $114 million – a 22 percent growth compared to the second quarter of 2002. Aviation revenue totaled $29.2 million – a 0.4 percent increase compared to the year-ago quarter. Total units sold for the quarter increased to 513,000 from 389,000 – representing an increase of 32 percent.
Revenue increased across all geographic regions during the second quarter of fiscal 2003 when compared to the year-ago quarter:
— North America revenue was
$100.3 million compared to $88.3 million, up 14 percent.
— Europe revenue was $37.0 million compared to $29.5 million, up 25 percent.
— Asia revenue was $6.2 million compared to $5.0 million, up 24 percent.
“We are pleased with our financial performance during the second quarter,” said Kevin Rauckman, chief financial officer of Garmin Ltd. “Our consumer business has now logged its seventh consecutive quarter of year-over-year revenue growth in excess of twenty percent. Gross margins remained strong at 58.3 percent compared to 55.1 percent in the prior year’s second quarter. We also generated $43 million of free cash flow for the quarter, resulting in a cash and marketable securities balance of $525 million at the end of the June 2003 quarter.”
Revenue for the six-month period ending June 28, 2003 was $267.3 million – up 20 percent from the $223.7 million generated in the year-ago period. Net income increased to $88.7 million or $0.81 diluted earnings per share, compared to $58.9 million or $0.54 diluted earnings per share in the year-ago period. Net income for the six-month period ended June 28, 2003 included a $2.0 million foreign currency loss as a result of a weaker U.S. dollar compared to the Taiwan dollar. Excluding the effects of foreign currency, diluted EPS for the period was $0.83 compared to $0.61 in the year-ago period.
Consumer revenue for the six-month period totaled $209.6 million – a 24 percent growth compared to the year-ago period. Aviation revenue totaled $57.7 million – a 5 percent increase compared to the same period in fiscal 2002. Total units sold for the period increased to 959,000 from 702,000 – representing an increase of 37 percent.
Revenue increased across all geographic regions during the six months ending June 28, 2003 when compared with the same period in 2002:
— North America revenue was $185.6 million compared to $161.4 million, up 15 percent. — Europe revenue was $70.5 million compared to $53.2 million, up 33 percent. — Asia revenue was $11.2 million compared to $9.1 million, up 23 percent.
The Company estimates that its diluted EPS for the third fiscal quarter of 2003, excluding effects for foreign currency, will be in the range of $0.33 to $0.36 on revenues of $120 million to $125 million.
Diluted EPS estimates for fiscal year 2003, excluding effects of foreign currency, will be in the range of $1.53 to $1.60 on revenues of $525 million to $540 million.
“Due to recent tax law changes and anticipated future cash balances, we are also pleased to report that the Garmin board of directors has approved a $0.50/share annual dividend payable to shareholders of record on December 1, 2003,” announced Dr. Kao. “This dividend will be paid on December 15, 2003.” The payment of future dividends will be at the discretion of the Board of Directors after taking into account various factors including operating results, anticipated needs and plans for acquisition or expansion.
The information for Garmin Ltd.‘s earnings call is as follows:
When: Wednesday, July 30, 2003 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
888-757-3036.
Contact: investor.relations@garmin.com
A phone recording will be available for 24 hours following the earnings call and can be accessed by dialing 800-642-1687 utilizing the access code 1639874. An archive of the live webcast will be available until August 30, 2003 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 future financial position, revenues, earnings, product introductions, 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. Information concerning risk factors that could affect Garmin’s actual results is contained in the Annual Report on Form 10-K for the year ended December 28, 2002 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2002 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, general recreation, automotive, wireless 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 StreetPilot are registered trademarks, and iQue is a trademark, of Garmin Ltd. or its subsidiaries.
Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
| (Unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| June 28, | December 28, | |||||||
| 2003 |
2002 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 266,479 | $ | 216,768 | ||||
| Marketable securities | 75,016 | 113,336 | ||||||
| Accounts receivable, net | 60,720 | 58,278 | ||||||
| Inventories | 66,846 | 57,507 | ||||||
| Deferred income taxes | 15,150 | 14,847 | ||||||
| Prepaid expenses and other current assets | 4,765 | 4,490 | ||||||
| Total current assets | 488,976 | 465,226 | ||||||
| Property and equipment, net | 78,013 | 74,440 | ||||||
| Restricted cash | 1,599 | 1,598 | ||||||
| Marketable securities | 183,318 | 132,372 | ||||||
| Other assets, net | 21,696 | 24,479 | ||||||
| Total assets | $ | 773,602 | $ | 698,115 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 27,873 | $ | 32,446 | ||||
| Other accrued expenses | $ | 22,871 | 22,879 | |||||
| Income taxes payable | $ | 23,918 | 18,080 | |||||
| Current portion of long-term debt | 0 | 0 | ||||||
| Total current liabilities | 74,662 | 73,405 | ||||||
| Long-term debt | 0 | 20,000 | ||||||
| Deferred income taxes | 1,939 | 2,211 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 1,081 | 1,080 | ||||||
| Additional paid-in capital | 131,133 | 129,431 | ||||||
| Retained earnings | 596,625 | 507,884 | ||||||
| Accumulated other comprehensive loss | (31,838 | ) | (35,896 | ) | ||||
| Total stockholders' equity | 697,001 | 602,499 | ||||||
| Total liabilities and stockholders' equity | $ | 773,602 | $ | 698,115 | ||||
Garmin
Ltd. And Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share information)
| 13-Weeks Ended |
26-Weeks Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Unaudited) | (Unaudited) | |||||||||||||
| June 28, 2003 |
June 29, 2002 |
June 28, 2003 |
June 29, 2002 | |||||||||||
| Net sales | $ | 143,495 | $ | 122,838 | $ | 267,283 | $ | 223,694 | ||||||
Cost of goods sold | 59,838 | 55,176 | 108,970 | 101,540 | ||||||||||
| Gross profit | 83,657 | 67,662 | 158,313 | 122,154 | ||||||||||
Selling, general and | ||||||||||||||
| administrative expenses | 13,935 | 11,099 | 27,529 | 22,338 | ||||||||||
Research and development | ||||||||||||||
| expense | 9,607 | 7,476 | 18,403 | 15,449 | ||||||||||
| 23,542 | 18,575 | 45,932 | 37,787 | |||||||||||
Operating income | 60,115 | 49,087 | 112,381 | 84,367 | ||||||||||
Other income (A) | (1,057 | ) | (7,501 | ) | (227 | ) | (6,909 | ) | ||||||
Income before income taxes | 59,058 | 41,586 | 112,154 | 77,458 | ||||||||||
Income tax provision | 11,812 | 9,440 | 23,413 | 18,551 | ||||||||||
Net income | $ | 47,246 | $ | 32,146 | $ | 88,741 | $ | 58,907 | ||||||
Net income per share: | ||||||||||||||
| Basic | $ | 0.44 | $ | 0.30 | $ | 0.82 | $ | 0.55 | ||||||
| Diluted | $ | 0.43 | $ | 0.30 | $ | 0.81 | $ | 0.54 | ||||||
Weighted average common | ||||||||||||||
| shares outstanding: | ||||||||||||||
| Basic | 107,995 | 107,788 | 107,972 | 107,782 | ||||||||||
| Diluted | 109,038 | 108,215 | 108,888 | 108,172 | ||||||||||
(A) Includes $1.3 million of foreign currency losses in Q2 2003 and $9.0 million of losses in Q2 2002;
includes $2.0 million of foreign currency losses in the 26-week period ended 6/28/03; and $9.7 million of
foreign corrency losses in the 26-week period ended 6/29/02.
Source: Garmin Ltd.
-0-
Investor Contact:
Polly Schwerdt, Investor Relations Manager, 913-397-8200, ext. 1394
E-mail: polly.schwerdt@garmin.com
Media Contacts:
Ted Gartner, Senior Media Relations Specialist, 913-397-8200, ext. 1240
E-mail: ted.gartner@garmin.com
Pete Brumbaugh, Senior Media Relations Specialist, 913-397-8200, ext. 1411
E-mail: pete.brumbaugh@garmin.com