10-KPeriod: FY2007

GARMIN LTD Annual Report, Year Ended Dec 29, 2007

Filed February 26, 2008For Securities:GRMN

Summary

Garmin Ltd. demonstrated significant growth in fiscal year 2007, with net sales surging by 79.3% to $3.18 billion, driven by broad-based demand across its four key segments: Automotive/Mobile, Outdoor/Fitness, Marine, and Aviation. The Automotive/Mobile segment, in particular, experienced exceptional growth, with net sales more than doubling, reflecting the increasing consumer adoption of personal navigation devices (PNDs) like the nüvi line. The company also saw robust performance in its other segments, supported by new product introductions and continued innovation. Garmin's financial health remained strong, with net income rising 66% year-over-year to $855 million. The company maintained a healthy gross margin of 46.0% and generated substantial operating cash flow. Strategic acquisitions in 2007, including the purchase of European distributors and location-based services provider Digital Cyclone Inc., further strengthened Garmin's market position and expanded its service offerings. The company also strategically extended its map data license agreement with NAVTEQ through 2015, ensuring access to critical mapping technology, while abandoning its previous intent to acquire Tele Atlas.

Financial Highlights

27 data points
Beta

Revenue

$3.18B

46.0% Gross Margin

Net Income

$855.01M

26.9% Net Margin

EPS (Diluted)

$3.89

Cash & Equivalents

$707.69M

Free Cash Flow

$682.09M

Financial Statements
Beta
Revenue$3.18B
Cost of Revenue$1.72B
Gross Profit$1.46B
R&D Expenses$159.41M
SG&A Expenses$189.55M
Operating Expenses$555.90M
Operating Income$907.35M
Interest Expense$207K
Net Income$855.01M
EPS (Basic)$3.95
EPS (Diluted)$3.89

Key Highlights

  • 1Net sales increased by 79.3% to $3.18 billion in fiscal year 2007.
  • 2Net income grew by 66% to $855 million.
  • 3The Automotive/Mobile segment experienced the most substantial growth, with net sales more than doubling.
  • 4Garmin successfully launched over 60 new products across its segments.
  • 5The company acquired four European distributors and Digital Cyclone Inc. to enhance market reach and service offerings.
  • 6Garmin extended its map data license agreement with NAVTEQ through 2015.
  • 7The company reported strong operating cash flow and maintained a healthy gross margin of 46.0%.

Frequently Asked Questions

Garmin's revenue growth in 2007 was primarily driven by the strong demand for its automotive/mobile products, particularly the nüvi personal navigation devices, fueled by increasing consumer awareness and adoption of GPS technology. The company also benefited from the introduction of over 60 new products across all its segments (Automotive/Mobile, Outdoor/Fitness, Marine, and Aviation) and solid demand in the Marine and Outdoor/Fitness sectors.

The Automotive/Mobile segment was the standout performer, with net sales increasing by 115.1%. The Aviation, Marine, and Outdoor/Fitness segments also showed strong growth, with net sales increasing by 26.7%, 22.1%, and 19.1%, respectively. This indicates broad-based demand across all of Garmin's key markets.

Garmin relies on a combination of patents, trademarks, and trade secrets to protect its technology. A key strategic move in 2007 was the extension of its map data license agreement with NAVTEQ through 2015, ensuring continued access to essential mapping data for its automotive products. The company also abandoned its previously announced intent to acquire Tele Atlas.

In 2007, Garmin focused on expanding its market presence and capabilities. Key strategic moves included the acquisition of four European distributors (France, Germany, Italy, Spain) to strengthen its European operations, and the acquisition of Digital Cyclone Inc., a location-based services provider, to enhance its mobile and subscription-based offerings. The company also completed the acquisition of Nautamatic Marine Systems, Inc. to bolster its marine autopilot business.