Garmin reports financial results for the third quarter of 2009

Garmin Ltd. (Nasdaq: GRMN) today announced third quarter results for the period ended September 26, 2009.

Third Quarter 2009 Financial highlights:

• Total revenue of $781 million, down 10% from $870 million in third quarter 2008
  • Automotive/Mobile segment revenue decreased 13% to $546 million
  • Outdoor/Fitness segment revenue increased 11% to $132 million
  • Aviation segment revenue decreased 29% to $58 million
  • Marine segment revenue increased 3% to $45 million
• North America and Europe continued to experience year-over-year revenue declines while Asia improved:
  • North America revenue was $503 million compared to $585 million, down 14%
  • Europe revenue was $237 million compared to $247 million, down 4%
  • Asia revenue was $41 million compared to $38 million, up 8%
• Gross margin improved to 52.4% compared to 44.3% in third quarter 2008 and declined slightly from 52.6% in second quarter 2009
• Operating margin improved to 30.3% compared to 24.6% in third quarter 2008 and 29.8% in second quarter of 2009
• Diluted earnings per share increased 30% to $1.07 from $0.82 in third quarter 2008; pro forma earnings per share increased 17% to $1.02 from $0.87 in the same quarter in 2008. (Pro forma earnings per share excludes the impact of foreign currency translation gain or loss.)
• Generated $281 million of free cash flow in third quarter 2009 for a cash and marketable securities balance of just over $1.8 billion.

Year-to-Date 2009 Financial highlights:

• Total revenue of $1.89 billion, down 23% from $2.45 billion year-to-date 2008
  • Automotive/Mobile segment revenue decreased 27% to $1.24 billion
  • Outdoor/Fitness segment revenue increased 4% to $320 million
  • Aviation segment revenue decreased 29% to $181 million
  • Marine segment revenue decreased 16% to $144 million
• All geographic areas experienced a year-to-date slowdown in revenues:
  • North America revenue was $1.20 billion compared to $1.57 billion, down 23%
  • Europe revenue was $577 million compared to $764 million, down 24%
  • Asia revenue was $105 million compared to $109 million, down 4%
• Diluted earnings per share decreased 21% to $2.12 from $2.68 in year-to-date 2008; pro forma EPS decreased 15% to $2.10 from $2.47 in year-to-date 2008. (Pro forma earnings per share excludes the impact of foreign currency translation gain or loss and the 2008 gain on sale of TeleAtlas N.V. shares.)
• Generated $813 million of free cash flow year-to-date.

Business highlights:

• Posted sequential revenue growth of 17% with both automotive/mobile and outdoor/fitness showing increased revenues.
• Reported 25% sequential revenue growth in the automotive/mobile segment with sequential gross margin and operating margin improvement of 360 and 490 basis points, respectively, as pricing, cost, and volumes improved.
• Resumed revenue growth in the outdoor/fitness segment due to growing worldwide interest in the product category and a strong reception to our latest fitness watches, the Forerunner^® 310XT and FR 60.
• Reported 3% revenue growth in the marine segment as market share gains offset the ongoing weakness within the marine industry.
• Sold 3.9 million units in the third quarter of 2009 driven by PND unit growth in both North America and Asia and strong outdoor/fitness unit growth resuming.
• Continued to lead in world-wide PND market share. Independent market share research indicates that we have expanded our leadership position in the North American PND market with approximately a 60% share, which is up sequentially from 57% in second quarter. We maintained a market share of approximately 20% in Europe.
• Finalized nüvifone launch initiatives with G60 availability in the U.S. (AT&T), Switzerland (Sunrise), and France (unlocked) and Asus leading efforts to launch the G60 and M20 in various Asian markets including Taiwan, Singapore and Malaysia.
• Introduced the nüvi® 1690T, a connected PND featuring rich, real-time content delivered wirelessly with product offerings in both the United States and Western Europe, for delivery in the fourth quarter.