What was the primary driver for the decrease in net sales?

The primary driver for the decrease in net sales was a 10% decline in both the automotive/mobile and marine segments. This was partially offset by growth in the fitness and aviation segments.

How did Garmin manage to increase net income despite lower sales?

Garmin managed to increase net income due to a significant favorable shift in its income tax provision, which turned into a benefit of $7.03 million from an expense of $12.70 million. This was primarily driven by the release of uncertain tax position reserves and the recognition of research and development tax credits.

What is the company's outlook on liquidity and capital resources?

Garmin expects its existing cash balances and cash flow from operations to be sufficient to meet its projected capital expenditures, working capital needs, and other cash requirements at least through the end of fiscal 2013. The company also has a $300 million share repurchase program authorized.

Are there any significant legal proceedings that could impact Garmin?

Garmin is involved in several legal proceedings, primarily related to patent infringement claims. While the company believes these claims are without merit and intends to defend itself vigorously, management cannot guarantee that an unfavorable outcome would not have a material adverse effect on its financial position or results of operations. However, management does not currently expect any of these proceedings to have a material adverse effect.

GRMN 10-Q Quarterly Report Q1 FY2013 — Revenue, Net Income, EPS

Summary

Garmin Ltd.'s first quarter 2013 report shows a 4% decrease in net sales to $531.96 million compared to the prior year's quarter, primarily driven by declines in the automotive/mobile and marine segments. Despite the revenue dip, net income saw a slight increase of 2% to $88.67 million, largely due to a favorable income tax provision resulting from the release of uncertain tax reserves and the recognition of R&D tax credits. The company experienced a significant increase in cash used in financing activities, mainly due to higher dividend payments.

Financial Highlights

50 data points

Beta

Revenue

$531.96M

0.5% Gross Margin

Net Income

$88.67M

0.2% Net Margin

EPS (Diluted)

$0.45

Total Assets

$4.57B

Cash & Equivalents

$1.09B

Free Cash Flow

$47.75M

Financial Statements

Beta

Revenue	$531.96M
Cost of Revenue	$255.82M
Gross Profit	$276.13M
R&D Expenses	$87.69M
SG&A Expenses	$86.27M
Operating Expenses	$196.21M
Operating Income	$79.93M
Net Income	$88.67M
EPS (Basic)	$0.45
EPS (Diluted)	$0.45
Shares Outstanding (Basic)	196K
Shares Outstanding (Diluted)	196K

Key Highlights

1Net sales decreased by 4% to $531.96 million for the quarter ended March 30, 2013, compared to $556.60 million in the prior year.
2Net income increased by 2% to $88.67 million from $86.86 million year-over-year.
3Operating income decreased by 12% to $79.93 million, impacted by lower revenues and increased R&D expenses.
4Automotive/Mobile and Marine segments experienced revenue declines of 10%, while Aviation saw a 10% increase.
5Research and Development expenses increased by 10% to $87.69 million, reflecting investment in new products and personnel.
6Cash provided by operating activities significantly decreased by $62.9 million to $59.36 million, primarily due to changes in working capital.
7The company announced a $300 million share repurchase program in February 2013 but had not repurchased any shares as of March 30, 2013.

GARMIN LTD Quarterly Report for Q1 Ended Mar 30, 2013

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions