Summary
Garmin Ltd. reported a decline in net sales and net income for the fiscal year ended December 26, 2009, compared to the previous year, largely attributed to macroeconomic conditions impacting its Automotive/Mobile and Aviation segments. Despite a 15.7% decrease in overall net sales, the company saw a 9.6% increase in its Outdoor/Fitness segment, driven by new product introductions. Gross profit margins improved across all segments, leading to a 4.5% increase in the overall gross profit margin percentage, particularly benefiting from cost reductions in the Automotive/Mobile segment. In 2009, Garmin continued to invest heavily in research and development, increasing R&D spending by 15.7% to support new product initiatives, including mobile handsets. The company also focused on cost management, reducing advertising and selling, general, and administrative expenses. Garmin's strong balance sheet remained a key strength, with substantial cash and marketable securities. The company anticipates moderate revenue growth in 2010, driven by new product launches and a potential recovery in market conditions.
Financial Highlights
52 data points| Revenue | $2.95B |
| Cost of Revenue | $1.50B |
| Gross Profit | $1.44B |
| R&D Expenses | $238.38M |
| SG&A Expenses | $264.20M |
| Operating Expenses | $658.10M |
| Operating Income | $786.01M |
| Interest Expense | $0 |
| Net Income | $703.95M |
| EPS (Basic) | $3.51 |
| EPS (Diluted) | $3.50 |
| Shares Outstanding (Basic) | 200.40M |
| Shares Outstanding (Diluted) | 201.16M |
Key Highlights
- 1Net sales decreased by 15.7% year-over-year to $2.95 billion, primarily due to a significant drop in the Automotive/Mobile (-19.1%) and Aviation (-24.0%) segments.
- 2The Outdoor/Fitness segment showed resilience with a 9.6% increase in net sales, reaching $469 million, driven by new product introductions.
- 3Overall gross profit margin improved by 450 basis points to 49.0%, with the Automotive/Mobile segment experiencing a notable 350 basis point expansion due to cost reductions.
- 4Research and Development (R&D) expenses increased by 15.7% to $238 million, reflecting continued investment in innovation and new product development, notably mobile handsets.
- 5The company maintained a strong cash position, with cash and cash equivalents increasing to $1.09 billion from $696 million in the prior year.
- 6Advertising expenses were reduced by 25.3% year-over-year to $156 million, reflecting cost-saving measures amidst revenue decline.
- 7Despite overall revenue decline, Garmin paid a consistent quarterly dividend of $0.75 per share.