Garmin Reports Fourth Quarter Results Highlighting EPS Growth and Revenue Growth in All Segments

The marine segment posted fourth quarter and full year revenue growth of 16% and 12%, respectively, exceeding our expectations. The marine industry, like aviation, has been slow to recover but Garmin has continually gained market share, allowing us to post our strongest ever revenues in 2011. We have invested heavily in our marine segment this year with increased research and development and the build-out of additional support infrastructure to serve our growing base of OEM customers. This strategy is working, as we announced the addition of Teleflex and Viking as OEM partners at the recent Miami Boat Show. We expect growth to continue in 2012 as we deliver further innovation and utility to the recreational marine market.”

Financial overview from Kevin Rauckman, Chief Financial Officer:

“Our fourth quarter and full year revenue growth illustrate the strength of our diversified business model, while our research and development investment highlights our commitment to investing in markets that will provide growth opportunities for many years to come,” said Kevin Rauckman, Chief Financial Officer of Garmin Ltd. “Through strong execution by our associates around the globe, we delivered revenue, operating income and EPS growth in the quarter.

Gross margin for the overall business in the fourth quarter was 48% which represents an improvement from the fourth quarter 2010 level of 45%. The automotive/mobile segment gross margin improved to 38%. The improvement is partially related to an increased average selling price as consumers select premium functionality and content. Gross margin for the aviation segment was negatively impacted by OEM program contributions.

Operating margin for the overall business was 22% in the current quarter as improved gross margins were partially offset by higher operating expenses. Operating margin, excluding the impact of deferred revenues and costs, was 26%. Total operating expenses were up $39 million on a year-over-year basis. Advertising expenses increased by $12 million as we conducted a television advertising campaign in 2011 that boosted market share. Selling, general and administrative and research and development expenses increased $14 million and $13 million, respectively, due primarily to increased headcount associated with recent acquisitions and an additional week in our fourth quarter 2011.

We generated $213 million of free cash flow in the fourth quarter of 2011 and $784 million for the full year. Our strong cash generation will continue to fund acquisitions throughout 2012 and significant returns to our shareholders through our quarterly dividend, which we propose to increase to $0.45 per quarter beginning in June 2012. The resulting cash and marketable securities balance was almost $2.5 billion at the end of the year.”

Dividend Recommendation

The Board intends to recommend to the shareholders for approval at the annual meeting to be held on June 1, 2012 a cash dividend in the amount of $1.80 per share (subject to possible adjustment based on the total amount of the dividend in Swiss Francs as approved at the annual meeting) payable in four installments as follows:

Dividend Date


Record Date


$'s per share

June 29, 2012 June 15, 2012 $0.45
September 28, 2012 September 14, 2012 $0.45
December 31, 2012 December 14, 2012 $0.45
March 29, 2013 March 15, 2013 $0.45

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