Garmin Reports Record Fourth Quarter and Fiscal Year, Provides 2005 Guidance, Announces 2005 Annual Meeting

Garmin Reports Record Fourth Quarter and Fiscal Year, Provides 2005 Guidance, Announces 2005 Annual Meeting

CAYMAN ISLANDS, Feb. 9 /PRNewswire-FirstCall/ -- Garmin Ltd. (NASDAQ:GRMN) today announced a record fourth quarter and fiscal year ended December 25, 2004. Revenue and net income both exceeded the guidance previously given by the company. The company's consumer segment experienced 27 percent revenue growth during the fourth quarter and 31 percent during 2004. The aviation segment also contributed revenue growth of 42 percent for the quarter and for the full year, which led to overall revenue growth of 33 percent for the year.

"2004 was another good year for Garmin. We introduced a record number (50) of new products in 2004. These products, which include many recreational and automotive units with beautiful TFT color displays, and a marine network system, which integrated our chart plotters, sounders, XM satellite weather receivers and radar, have all been very well received by the market," said Dr. Min Kao, CEO of Garmin Ltd. "Consumer awareness and interest in the utility of GPS navigation continue to grow, and we experienced strong demand across all product lines."

More than 2.3 million Garmin products were shipped in 2004, raising the company's total to over 10 million shipped to date, which is an important benchmark of the strength of the Garmin brand. The company also completed certification of its G1000 integrated cockpit for a total of six aircraft models (the Cessna 182 and 206, Diamond DA40 and DA42, and Mooney Ovation2 and Bravo) and started shipping this acclaimed integrated avionics system during the year.

"I am pleased to report that, with much hard work and additional investment in people and equipment, we have overcome most of the component shortage and product delivery challenges that were experienced during 2004. We were able to meet most of the product demands in the fourth quarter and have additionally replenished our inventory to meet the anticipated demands for the coming marine and spring seasons," added Dr. Kao.

Fourth Quarter 2004

Revenue for the quarter increased 30 percent to $220.9 million from $170.1 million in the year-ago quarter, above guidance given of $200-$204 million. Net income decreased to $47.6 million, or $0.44 diluted earnings per share, compared to $54.6 million or $0.50 diluted earnings per share in the year-ago quarter. Fourth quarter net income included a $25.3 million foreign currency loss as a result of a weaker U.S. dollar compared to the New Taiwan dollar. Excluding the effects of foreign currency, diluted EPS for the quarter was $0.63 compared to $0.47 in the year-ago quarter, exceeding quarterly guidance of $0.50 - $0.54.

Consumer revenue for the fourth quarter totaled $173.7 million -- a 27 percent growth compared to the fourth quarter of 2003. Aviation revenue totaled $47.2 million -- a 42 percent increase compared to the year-ago quarter. Total units sold for the quarter increased to 718,000 from 591,000 -- representing an increase of 21 percent.

Revenue increased across North American and European regions during the fourth quarter of fiscal 2003 when compared to the year-ago quarter:

-- North America revenue was $164.0 million compared to $130.0 million,
up 26 percent.
-- Europe revenue was $47.8 million compared to $34.0 million, up
41 percent.
-- Asia revenue was $9.1 million compared to $6.1 million, up 49 percent.




"We are pleased with our financial results for the fourth quarter and fiscal year 2004," said Kevin Rauckman, chief financial officer of Garmin Ltd. "Our consumer business has now logged its thirteenth consecutive quarter of year-over-year revenue growth in excess of 20 percent. Gross margins came in above our expectations at 54.7 percent for the fourth quarter. We also generated $37.2 million of free cash flow (defined as operating cash flow less capital expenditures for property, plant, and equipment) for the quarter, resulting in a cash and marketable securities balance of $573.6 million at the end of fiscal 2004."

The company believes that free cash flow is an important measure because management uses it as a measure of the company's quality of earnings and its ability to reinvest in the business.

Fiscal 2004 Results

Revenue for the fiscal year ending December 25, 2004 was $762.5 million -- up 33 percent from the $573 million generated in the year-ago period, above guidance given of $742 - $746 million. Net income increased to $205.7 million, or $1.89 diluted earnings per share, compared to $178.6 million or $1.64 diluted earnings per share in the year-ago period. On a year-to-date basis, foreign currency fluctuations in 2004 resulted in a $24.8 million currency loss. Excluding the effects of foreign currency, diluted EPS for 2004 was $2.07, which exceeded annual guidance of $1.95-$1.98.

Consumer revenue for the fiscal year totaled $591.0 million -- a 31 percent growth compared to fiscal 2003. Aviation revenue totaled $171.5 million -- a 42 percent increase compared to fiscal 2003. Total units sold for the period increased to 2,306,000 from 2,066,000 -- representing an increase of 12 percent.

Revenue increased across all geographic regions during fiscal 2004 when compared to 2003:

-- North America revenue was $531.5 million compared to $414.6 million, up
28 percent.
-- Europe revenue was $196.9 million compared to $133.2 million, up
48 percent.
-- Asia revenue was $34.1 million compared to $25.2 million, up
35 percent.


Foreign Currency Translation-Non-GAAP Measures


Management believes that earnings per share before the impact of foreign currency translation gain or loss is an important measure. The majority of the company's consolidated foreign currency translation gain or loss results from translation into New Taiwan dollars at the end of each reporting period of the significant cash and marketable securities, receivables and payables held in U.S. dollars by the company's Taiwan subsidiary. Such translation is required under GAAP because the functional currency of this subsidiary is New Taiwan dollars. However, there is minimal cash impact from such foreign currency translation and management expects that the Taiwan subsidiary will continue to hold the majority of its cash, cash equivalents and marketable securities in U.S. dollars. Accordingly, earnings per share before the impact of foreign currency translation gain or loss allows an assessment of the company's operating performance before the non-cash impact of the position of the U.S. dollar versus the New Taiwan dollar, which permits a consistent comparison of results between periods.

2005 Outlook

Garmin remains committed to expansion of its growing range of products and its ability to serve distributors and customers around the world. The company looks forward to the following growth opportunities in 2005:

-- The introduction of approximately 60 new products during 2005 across
our consumer and aviation segments.
-- Our recently announced partnership with Chrysler's MOPAR division to
provide the Navus premium auto navigation product to a number of
Chrysler, Dodge, and Jeep models.
-- Continued solid growth in the aviation segment, spurred by a full year
of G1000 avionics sales into popular general aviation aircraft models
from Cessna, Diamond, and Mooney as well as additional aircraft models
scheduled for certification during 2005.




Diluted EPS for fiscal year 2005, excluding effects of foreign currency, is estimated to be in the range of $2.30 to $2.38 on estimated revenues of $890 million to $915 million. Due to the desire to focus more on the long- term results of the company, management has elected to discontinue the practice of providing specific quarterly revenue, margin, and EPS guidance. Management will continue to provide annual guidance updates and progress reports on a quarterly basis.

2005 Annual Meeting

Garmin Ltd. also announced that its annual shareholders' meeting will be held at 10:00 a.m., Central Time, on June 3, 2005 at the Ritz Charles Conference Center, 9000 West 137th Street, Overland Park, KS 66221. The record date for shareholders entitled to vote at the annual meeting is April 18, 2005

Earnings Call Information
The information for Garmin Ltd.'s earnings call is as follows:

When: Wednesday, February 9, 2005 at 11:00 a.m. Eastern
Where: http://www.garmin.com/aboutGarmin/invRelations/irCalendar.html
How: Simply log on to the web at the address above or call to listen
in at 800-883-9537.
Contact: investor.relations@garmin.com

A phone recording will be available for 24 hours following the earnings call and can be accessed by dialing 800-642-1687 utilizing the access code 3256928. An archive of the live webcast will be available until March 11, 2005 on the Garmin website at http://www.garmin.com/. To access the replay, click on the Investor Relations link and click over to the Events Calendar page.

This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding the company's estimated earnings and revenue for fiscal 2005, and the company's plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors affecting Garmin, including, but not limited to, the risk factors that are described in the Annual Report on Form 10-K for the year ended December 28, 2003 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin's 2003 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html .

Through its operating subsidiaries, Garmin Ltd. designs, manufactures, and markets navigation, communications and information devices, most of which are enabled by GPS technology. Garmin is a leader in the general aviation and consumer markets and its products serve aviation, marine, general recreation, automotive, wireless and OEM applications. Garmin Ltd. is incorporated in the Cayman Islands, and its principal subsidiaries are located in the United States, Taiwan and United Kingdom. For more information, visit the investor relations site of Garmin Ltd. at http://www.garmin.com/ or contact the Investor Relations department at 913-397-8200.

Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share information)

13-Weeks Ended
Dec. 25, Dec. 27,
2004 2003

Net sales $220,948 $170,144

Cost of goods sold 100,151 74,624

Gross profit 120,797 95,520

Selling, general and
administrative expenses 23,089 19,284

Research and development expense 17,956 13,571
41,045 32,855

Operating income 79,752 62,665

Other income / (expense) (A) (22,164) 6,430

Income before income taxes 57,588 69,095

Income tax provision 9,986 14,510


Net income $47,602 $54,585

Net income per share:
Basic $0.44 $0.51
Diluted $0.44 $0.50

Weighted average common
shares outstanding:
Basic 108,162 108,066
Diluted 109,233 109,094


(A) Includes $25.3 million of foreign currency losses in Q4
2004 and $4.4 million of gains in Q4 2003.



Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share information)

Fiscal Year Ended
Dec. 25, Dec. 27,
2004 2003

Net sales $762,549 $572,989

Cost of goods sold 351,310 242,448

Gross profit 411,239 330,541

Selling, general and
administrative expenses 78,991 59,835

Research and development expense 61,580 43,706
140,571 103,541

Operating income 270,668 227,000

Other expense (A) (15,457) (1,057)

Income before income taxes 255,211 225,943

Income tax provision 49,511 47,309


Net income $205,700 $178,634

Net income per share:
Basic $1.90 $1.65
Diluted $1.89 $1.64

Weighted average common
shares outstanding:
Basic 108,161 108,011
Diluted 109,030 108,902


(A) Includes $24.8 million of foreign currency losses in 2004 and
$6.7 million of losses in 2003.



Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)

December 25, December 27,
2004 2003

Assets
Current assets:
Cash and cash
equivalents $249,909 $274,329
Marketable securities 64,367 53,127
Accounts receivable,
net 110,119 82,718
Inventories 154,980 96,794
Deferred income taxes 36,921 26,812
Prepaid expenses and
other current assets 19,069 6,148

Total current assets 635,365 539,928

Property and equipment, net 171,630 104,784

Restricted cash 1,457 1,602
Marketable securities 257,848 168,320
License agreements 22,525 14,966
Other assets, net 26,960 27,345

Total assets $1,115,785 $856,945

Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $53,673 $40,671
Salaries and benefits
payable 7,183 4,792
Warranty reserve 15,518 8,399
Income taxes payable 70,933 38,946
Other accrued expenses 28,960 11,626

Total current liabilities 176,267 104,434

Deferred income taxes 5,440 2,821

Stockholders' equity:
Common stock 1,084 1,082
Additional paid-in
capital 108,949 104,022
Retained earnings 815,210 663,604
Accumulated other
comprehensive
loss/gains 8,835 (19,018)

Total stockholders' equity 934,078 749,690
Total liabilities and
stockholders' equity $1,115,785 $856,945



Source: Garmin Ltd.

CONTACT: Pete Brumbaugh of Garmin Ltd., +1-913-440-1411

Web site: http://www.garmin.com/


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