| Cayman Islands. Exceptional $1.03 billion 2005 revenue for electronics company Garmin |
|
|
|
| Thursday, 23 February 2006 | |
|
Company news: Garmin Ltd. has announced a record fourth quarter and fiscal year ended December 31, 2005. Highlights of the quarter and full year include: Fourth Quarter 2005 Financial highlights: Total revenue of $319.3 million, up 45% from $220.9 million in fourth quarter 2004; Consumer segment revenue increased 50% to $260.2 million in fourth quarter 2005; Aviation segment revenue increased 25% to $59.1 million in fourth quarter 2005; All geographic areas experienced solid growth; North America revenue was $211.4 million compared to $164.0 million, up 29 percent; Europe revenue was $92.9 million compared to $47.8 million, up 94 percent; Asia revenue was $15.0 million compared to $9.1 million, up 65 percent; Earnings per share increased 82% to $0.80 from $0.44 in 2004; excluding foreign exchange, EPS increased 38% to $0.87 from $0.63 in 2004. Business highlights: Strong holiday season, requiring three-shift, full-capacity production at our Taiwan manufacturing facility to meet demand for product; 1.03 million units sold in the fourth quarter of 2005, up 43% from the same quarter in 2004; Seasonal promotion campaigns, multi-media advertising, and cooperative advertising activities stimulated sales and solidified our leadership position in the U.S.; Intense multi-media marketing and advertising campaign in Europe; resulted in greater brand awareness. FY 2005 Financial highlights: Total revenue of $1.03 billion, up 35% from $762.5 million in fiscal 2004; Consumer segment revenue increased 35% to $798.6 million in 2005; Aviation segment revenue increased 34% to $229.2 million in 2005; All geographic areas experienced solid growth; North America revenue was $661.1 million compared to $531.5 million, up 24 percent; Europe revenue was $316.2 million compared to $196.9 million, up 61 percent; Asia revenue was $50.5 million compared to $34.1 million, up 48 percent; Earnings per share increased 51% to $2.85 from $1.89 in 2004; excluding foreign exchange, EPS increased 32% to $2.74 from $2.07 in 2004. Business highlights: Introduced 55 new products in 2005, expanding our portable automotive product line and refreshing a number of product categories; 3.03 million units sold in 2005, up 31% from 2004, raising the Company's total to over fourteen million units shipped to date, an important benchmark of the strength of the Garmin brand; Established relationships with multiple car rental companies which will create important trial opportunities among prospective customers; Solidified our position as the leader in GPS-enabled fitness devices with the introduction of the Edge bicycle product; Partnered with leading motorcycle manufacturers to provide custom solutions while also serving the aftermarket with robust off-the-shelf products; Achieved status of a tier 1 OEM supplier to Honda Motorcycles with the introduction of the Honda Satellite Linked Navigation System; Certified seven new airframes with the G1000 cockpit in 2005, bringing the total airframes carrying the G1000 cockpit to thirteen while also adding new capabilities such as terrain warning, RADAR, and digital autopilot which further increases our leadership position in the integrated cockpit market for general aviation; Expanded advertising campaign in the U.S. strengthened our leadership position in the face of growing competition; Aggressive marketing and advertising throughout Europe resulted in greater awareness Executive overview from Dr. Min Kao, Chairman and Chief Executive Officer: "2005 was another remarkable year for Garmin. We are delighted to have introduced a record number (55) of innovative new products. These products, which include many automotive, recreational, fitness, and marine products, have been well received by the market. We also look forward to our customers' reactions to the many recently announced products scheduled for retail delivery in early 2006. We experienced triple digit growth in our automotive product line, which demonstrates that our products are well-positioned to take advantage of the growing demand for portable navigation devices both in the U.S. and in Europe. In addition, 2005 aviation sales were also strong due to increased OEM shipments of G1000 integrated cockpit systems and continued interest in other panel-mount and portable products. We look forward to continued success from the popular StreetPilot c-series and i-series automotive products during 2006. Through continuous innovation, we will provide compelling, competitive and creative products like the highly acclaimed nuvi, which combines navigation with features like a language translator, travel guide, MP3 player, and more. We have the focus and commitment to continue our leadership position in the rapidly expanding automotive market through 2006 and beyond. To satisfy these growth goals, we have significantly expanded our worldwide marketing and sales efforts. We have also increased our manufacturing capacity to meet future demand and compete effectively in the global marketplace." Financial overview from Kevin Rauckman, Chief Financial Officer: "We are very pleased with our financial results for the fourth quarter and fiscal year 2005," said Kevin Rauckman, chief financial officer of Garmin Ltd. "Our revenue and earnings per share during 2005 grew 35% and 32% respectively, exceeding our expectations. Garmin has recently completed five years as a public company and has consistently generated top line and bottom line growth with a 5-year compounded annual growth rate of revenue and earnings per share of 24% and 23%, respectively. "We also generated $219.9 million of free cash flow in 2005, resulting in cash and marketable securities balance of $711.1 million at the end of the fiscal year. Our return on invested capital (ROIC) exceeded 65% during fiscal 2005." Fiscal 2006 Outlook Garmin has made a policy change with regard to segment reporting and providing future earnings guidance. In SEC filings beginning with the first quarter of fiscal 2006, the company will provide segment data for four business segments - aviation, marine, outdoor/fitness, and automotive/mobile segments. We believe that additional segmentation of the company's results is in line with our recent focused approach to each of the markets that we now serve. Increasingly, we are optimizing our engineering, marketing, and production teams to take advantage of these rapidly expanding opportunities for growth. We also believe that the investment community wishes to have increased visibility into our business with more information about each of these four segments. We remain optimistic about the future success of our business and our ability to serve customers and distributors around the world. General perspective on the business expectations for 2006, including our new segments are: We anticipate overall revenue to exceed $1.3 billion in 2006, and earnings per share to exceed $3.19. We assume our 2006 effective tax rate will be approximately 16% and have included an earnings per share impact of $0.07 in our estimate due to the effects of implementing FAS123(R). We anticipate aviation revenues to grow at least 20 percent in 2006. Growth is expected to occur within both G1000 OEM and aviation aftermarket shipments. We anticipate marine revenues to grow at least 10 percent in 2006. Growth will come from exciting dual-beam and digital fishfinder products and next generation offshore and inland marine cartography that will be introduced across our new marine chartplotter lines. We anticipate outdoor/fitness segment revenues to grow at least 15 percent in 2006 led by Fitness products like the new Forerunner with watch-like styling, and the Edge designed specifically for the cycling enthusiasts. In addition, new outdoor products with high sensitivity GPS receivers and pre-programmed mapping data cards will drive additional growth in this segment during 2006. We anticipate automotive/mobile revenues to grow above 60 percent in 2006, with declining operating margins due to product mix and a continued transition toward mass market levels. We look forward to introducing between 50 and 60 new products in 2006; ten new products introduced so far in 2006, many during January's very successful Consumer Electronics Show in Las Vegas. Expansion of Taiwan manufacturing to meet growing demand for our products with the purchase of a new manufacturing facility in January 2006, significantly expanding our future manufacturing capacity. Increased focus on the development of European opportunities; growth will be supported with a planned expansion of our European headquarters and distribution center and continued emphasis on advertising to enhance awareness of the Garmin brand. 2006 Annual Meeting Garmin Ltd. also announced that its annual shareholders meeting will be held at 10:00 a.m., Central Time, on June 9, 2006 at the headquarters of Garmin International, Inc., 1200 E. 151st Street, Olathe, Kansas, 66062. The record date for shareholders entitled to vote at the annual meeting is April 17, 2006. |
|
| Last Updated ( Thursday, 23 February 2006 ) |
| < Prev | Next > |
|---|