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Garmin 10-Q 2005

Documents found in this filing:

  1. 10-Q
  2. Ex-31.1
  3. Ex-31.2
  4. Ex-32.1
  5. Ex-32.2
  6. Ex-32.2
Form 10-Q
Table of Contents

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 24, 2005

 

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     

 

Commission file number 0-31983

 


 

GARMIN LTD.

(Exact name of Company as specified in its charter)

 

Cayman Islands   98-0229227

(State or other jurisdiction

of incorporation or organization)

  (I.R.S. Employer identification no.)

5th Floor, Harbour Place, P.O. Box 30464 SMB,

103 South Church Street

George Town, Grand Cayman, Cayman Islands

  N/A
(Address of principal executive offices)   (Zip Code)

 

Company’s telephone number, including area code: (345) 946-5203

 

No Changes

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  þ    NO  ¨

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES  þ    NO  ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES  ¨    NO  þ

 

Number of shares outstanding of the Company’s common shares as of October 28, 2005

Common Shares, $.01 par value: 107,937,085

 



Table of Contents

Garmin Ltd.

Form 10-Q

Quarter Ended September 24, 2005

 

Table of Contents

 

          Page

Part I - Financial Information

    

Item 1.

   Condensed Consolidated Financial Statements (Unaudited)    3
     Introductory Comments    3
     Condensed Consolidated Balance Sheets at September 24, 2005 and December 25, 2004    4
     Condensed Consolidated Statements of Income for the 13- and 39-weeks ended September 24, 2005 and September 25, 2004    5
     Condensed Consolidated Statements of Cash Flows for the 39-weeks ended September 24, 2005 and September 25, 2004    6
     Notes to Condensed Consolidated Financial Statements    7

Item 2.

   Management’s Discussion and Analysis of Financial Condition and Results of Operations    14

Item 3.

   Quantitative and Qualitative Disclosures About Market Risk    22

Item 4.

   Controls and Procedures    23

Part II - Other Information

    

Item 1.

   Legal Proceedings    24

Item 2.

   Unregistered Sales of Equity Securities and Use of Proceeds    24

Item 3.

   Defaults Upon Senior Securities    24

Item 4.

   Submission of Matters to a Vote of Securities Holders    24

Item 5.

   Other Information    24

Item 6.

   Exhibits    25
Signature Page    26
Index to Exhibits    27

 

2


Table of Contents

Garmin Ltd.

Form 10-Q

Quarter Ended September 24, 2005

 

Part I – Financial Information

 

Item 1. Condensed Consolidated Financial Statements (Unaudited)

 

Introductory Comments

 

The Condensed Consolidated Financial Statements of Garmin Ltd. (“Garmin” or the “Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to enable a reasonable understanding of the information presented. These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 25, 2004. Additionally, the Condensed Consolidated Financial Statements should be read in conjunction with Item 2 of Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in this Form 10-Q.

 

The results of operations for the 13- and 39-week periods ended September 24, 2005 are not necessarily indicative of the results to be expected for the full year 2005.

 

3


Table of Contents

 

Garmin Ltd. And Subsidiaries

 

Condensed Consolidated Balance Sheets

 

(In thousands, except share information)

 

    

(Unaudited)

September 24,
2005


    December 25,
2004


Assets

              

Current assets:

              

Cash and cash equivalents

   $ 331,245     $ 249,909

Marketable securities

     36,048       64,367

Accounts receivable, net

     151,777       110,119

Inventories

     173,198       154,980

Deferred income taxes

     47,621       38,527

Prepaid expenses and other current assets

     17,834       19,069
    


 

Total current assets

     757,723       636,971

Property and equipment, net

     177,064       171,630

Marketable securities

     333,609       257,848

Restricted cash

     1,411       1,457

Other assets, net

     34,919       49,485
    


 

Total assets

   $ 1,304,726     $ 1,117,391
    


 

Liabilities and Stockholders’ Equity

              

Current liabilities:

              

Accounts payable

   $ 50,210     $ 53,673

Salaries and benefits payable

     8,510       7,183

Warranty reserve

     16,768       15,518

Other accrued expenses

     28,959       28,960

Income taxes payable

     63,744       70,933

Dividends payable

     54,000        
    


 

Total current liabilities

     222,191       176,267

Deferred income taxes

     14,103       5,267

Stockholders’ equity:

              

Common stock, $0.01 par value, 500,000,000 shares authorized:

              

Issued and outstanding shares - 108,327,000 as of December 25, 2004 and 107,897,171 as of September 24, 2005

     1,080       1,084

Additional paid-in capital

     88,948       108,949

Retained earnings

     985,293       815,209

Accumulated other comprehensive (income) loss

     (6,889 )     10,615
    


 

Total stockholders’ equity

     1,068,432       935,857
    


 

Total liabilities and stockholders’ equity

   $ 1,304,726     $ 1,117,391
    


 

 

See accompanying notes.

 

4


Table of Contents

 

Garmin Ltd. And Subsidiaries

 

Condensed Consolidated Statements of Income (Unaudited)

 

(In thousands, except per share information)

 

     13-Weeks Ended

    39-Weeks Ended

 
    

September 24,

2005


   

September 25,

2004


   

September 24,

2005


   

September 25,

2004


 

Net sales

   $ 251,329     $ 193,616     $ 708,477     $ 541,601  

Cost of goods sold

     121,877       81,945       335,846       251,160  
    


 


 


 


Gross profit

     129,452       111,671       372,631       290,441  

Selling, general and administrative expenses

     24,180       19,859       77,790       55,902  

Research and development expense

     20,116       14,695       54,862       43,625  
    


 


 


 


       44,296       34,554       132,652       99,527  
    


 


 


 


Operating income

     85,156       77,117       239,979       190,914  

Other income (expense):

                                

Interest income

     4,726       2,392       13,115       6,304  

Interest expense

     (3 )     (10 )     (46 )     (26 )

Foreign currency

     36,388       4,413       23,784       470  

Other

     (140 )     (2 )     158       (40 )
    


 


 


 


       40,971       6,793       37,011       6,708  
    


 


 


 


Income before income taxes

     126,127       83,910       276,990       197,622  

Income tax provision

     23,637       16,782       52,905       39,523  
    


 


 


 


Net income

   $ 102,490     $ 67,128     $ 224,085     $ 158,099  
    


 


 


 


Net income per share:

                                

Basic

   $ 0.95     $ 0.62     $ 2.07     $ 1.46  

Diluted

   $ 0.94     $ 0.62     $ 2.05     $ 1.45  

Weighted average common shares outstanding:

                                

Basic

     107,845       108,119       108,214       108,159  

Diluted

     108,930       108,879       109,159       108,989  

Dividends declared per share

   $ 0.50     $ 0.50     $ 0.50     $ 0.50  

 

See accompanying notes.

 

5


Table of Contents

 

Garmin Ltd. And Subsidiaries

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

(In thousands)

 

     39-Weeks Ended

 
    

September 24,

2005


    September 25,
2004


 

Operating activities:

                

Net income

   $ 224,085     $ 158,099  

Adjustments to reconcile net income to net cash provided by operating activities:

                

Depreciation

     13,703       12,617  

Amortization

     20,435       13,149  

Loss on sale of property and equipment

     8       112  

Provision for doubtful accounts

     18       671  

Deferred income taxes

     (372 )     6,191  

Foreign currency translation gains/losses

     (13,503 )     5,781  

Provision for obsolete inventories

     10,830       8,104  

Stock compensation expense

     363       —    

Changes in operating assets and liabilities:

                

Accounts receivable

     (42,015 )     (3,850 )

Inventories

     (30,818 )     (31,253 )

Other current assets

     (3,321 )     (27,536 )

Accounts payable

     (2,173 )     6,658  

Other current liabilities

     2,683       15,562  

Income taxes

     (4,581 )     15,095  
    


 


Net cash provided by operating activities

     175,342       179,400  

Investing activities:

                

Purchases of property and equipment

     (20,510 )     (57,806 )

Purchase of intangible assets

     (404 )     (12,736 )

Purchase of marketable securities, net

     (50,086 )     (82,425 )

Change in restricted cash

     42       —    

Proceeds from sale of property and equipment

     —         25  
    


 


Net cash used in investing activities

     (70,958 )     (152,942 )

Financing activities:

                

Stock repurchase

     (26,654 )     (3,182 )

Proceeds from issuance of common stock

     4,238       988  
    


 


Net cash used in financing activities

     (22,416 )     (2,194 )

Effect of exchange rate changes on cash and cash equivalents

     (633 )     (1,089 )
    


 


Net increase in cash and cash equivalents

     81,336       23,175  

Cash and cash equivalents at beginning of period

     249,909       274,329  
    


 


Cash and cash equivalents at end of period

   $ 331,245     $ 297,504  
    


 


 

See accompanying notes.

 

6


Table of Contents

Garmin Ltd. and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

September 24, 2005

(In thousands, except share and per share information)

 

1. Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the 13- and 39-week periods ended September 24, 2005 are not necessarily indicative of the results that may be expected for the year ended December 31, 2005.

 

The condensed consolidated balance sheet at December 25, 2004 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 25, 2004.

 

The Company’s fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year. Therefore the financial results of certain fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13 weeks. The quarters ended September 24, 2005 and September 25, 2004 both contain operating results for 13 weeks.

 

2. Inventories

 

The components of inventories consist of the following:

 

    

September 24,

2005


   

December 25,

2004


 

Raw materials

   $ 54,116     $ 69,036  

Work-in-process

     32,166       29,959  

Finished goods

     98,753       67,274  

Inventory reserves

     (11,837 )     (11,289 )
    


 


Inventory, net of reserves

   $ 173,198     $ 154,980  
    


 


 

3. Stock Purchase Plan

 

The Board of Directors approved a share repurchase program on April 21, 2004, authorizing the Company to purchase up to 3.0 million shares of Garmin Ltd.’s common stock as market and business conditions warrant. The share repurchase authorization expires on April 30, 2006. From inception to date, 738,000 shares have been repurchased and retired under this plan as of September 24, 2005. These amounts have been reported as a reduction in additional paid-in capital because companies incorporated in the Cayman Islands are not permitted by law to hold treasury stock.

 

4. Long Term Debt

 

Garmin had no long-term debt as of September 24, 2005 or December 25, 2004.

 

7


Table of Contents
5. Earnings Per Share

 

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share information):

 

     13-Weeks Ended

     September 24,
2005


   September 25,
2004


Numerator:

             

Numerator for basic and diluted net income per share – net income

   $ 102,490    $ 67,128
    

  

Denominator:

             

Denominator for basic net income per share – weighted-average common shares

     107,845      108,119

Effect of dilutive securities – employee stock options

     1,085      760
    

  

Denominator for diluted net income per share – adjusted weighted-average common shares

     108,930      108,879
    

  

Basic net income per share

   $ 0.95    $ 0.62
    

  

Diluted net income per share

   $ 0.94    $ 0.62
    

  

     39-Weeks Ended

     September 24,
2005


   September 25,
2004


Numerator:

             

Numerator for basic and diluted net income per share – net income

   $ 224,085    $ 158,099
    

  

Denominator:

             

Denominator for basic net income per share – weighted-average common shares

     108,214      108,159

Effect of dilutive securities – employee stock options

     945      830
    

  

Denominator for diluted net income per share – adjusted weighted-average common shares

     109,159      108,989
    

  

Basic net income per share

   $ 2.07    $ 1.46
    

  

Diluted net income per share

   $ 2.05    $ 1.45
    

  

 

There were 534,720 antidilutive options for the 39-week period ended September 24, 2005 and no antidilutive options for the 13-week period ended September 24, 2005.

 

8


Table of Contents
6. Comprehensive Income

 

Comprehensive income is comprised of the following (in thousands):

 

     13-Weeks Ended

 
     September 24,
2005


    September 25,
2004


 

Net income

   $ 102,490     $ 67,128  

Translation adjustment

     (37,772 )     (3,074 )

Change in fair value of available-for-sale marketable securities, net of deferred taxes

     (738 )     1,339  
    


 


Comprehensive income

   $ 63,980     $ 65,393  
    


 


     39-Weeks Ended

 
     September 24,
2005


    September 25,
2004


 

Net income

   $ 224,085     $ 158,099  

Translation adjustment

     (15,528 )     4,092  

Change in fair value of available-for-sale marketable securities, net of deferred taxes

     (1,976 )     (568 )
    


 


Comprehensive income

   $ 206,581     $ 161,623  
    


 


 

9


Table of Contents
7. Segment Information

 

Revenues and income before income taxes for each of the Company’s reportable segments are presented below:

 

     13-Weeks Ended

    

September 24,

2005


  

September 25,

2004


     Consumer

   Aviation

   Consumer

   Aviation

Sales to external customers

   $ 190,692    $ 60,637    $ 145,481    $ 48,135

Income before income taxes

   $ 95,932    $ 30,195    $ 64,300    $ 19,610
     39-Weeks Ended

    

September 24,

2005


  

September 25,

2004


     Consumer

   Aviation

   Consumer

   Aviation

Sales to external customers

   $ 538,433    $ 170,044    $ 417,330    $ 124,271

Income before income taxes

   $ 201,490    $ 75,500    $ 153,457    $ 44,165

 

Revenues and long-lived assets (property and equipment) by geographic area are as follows for the 39-week periods ended September 24, 2005 and September 25, 2004:

 

     North
America


   Asia

   Europe

   Total

September 24, 2005

                           

Sales to external customers

   $ 449,715    $ 35,451    $ 223,311    $ 708,477

Long-lived assets

   $ 134,681    $ 41,841    $ 542    $ 177,064

September 25, 2004

                           

Sales to external customers

   $ 367,477    $ 25,035    $ 149,089    $ 541,601

Long-lived assets

   $ 117,884    $ 35,159    $ 415    $ 153,458

 

10


Table of Contents
8. Stock Compensation Plans

 

Accounting for Stock-Based Compensation

 

At September 24, 2005, the Company has three stock-based employee compensation plans. The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. Approximately $363,000 of stock-based employee compensation cost is reflected in net income for the 13-weeks and 39-weeks ended September 25, 2004. No stock-based employee compensation cost is reflected in net income for the 13-weeks and 39-weeks ended September 25, 2004, as all awards granted under those plans had a stated price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

 

     13-Weeks Ended

 
     September 24,
2005


    September 25,
2004


 

Net income as reported

   $ 102,490     $ 67,128  

Deduct: Total stock-based employee compensation expense determined under fair-value based method for all awards, net of tax effects

     (1,815 )     (1,261 )
    


 


Pro forma net income

   $ 100,675     $ 65,867  
    


 


Net income per share as reported:

                

Basic

   $ 0.95     $ 0.62  

Diluted

   $ 0.94     $ 0.62  

Pro forma net income per share:

                

Basic

   $ 0.93     $ 0.61  

Diluted

   $ 0.92     $ 0.60  
     39-Weeks Ended

 
     September 24,
2005


    September 25,
2004


 

Net income as reported

   $ 224,085     $ 158,099  

Deduct: Total stock-based employee compensation expense determined under fair-value based method for awards, net of tax effects

     (5,028 )     (3,747 )
    


 


Pro forma net income

   $ 219,057     $ 154,352  
    


 


Net income per share as reported:

                

Basic

   $ 2.07     $ 1.46  

Diluted

   $ 2.05     $ 1.45  

Pro forma net income per share:

                

Basic

   $ 2.02     $ 1.43  

Diluted

   $ 2.01     $ 1.42  

 

11


Table of Contents

2000 Non-employee Directors’ Option Plan

 

In October 2000, the stockholders adopted a stock option plan for non-employee directors (the Directors Plan) providing for grants of options for up to 50,000 common shares of the Company’s stock. The term of each award is ten years. All awards vest evenly over a three-year period. During 2005, 2004, and 2003, options to purchase 5,500, 6,621, and 3,648 shares, respectively, were granted under this plan.

 

2000 Equity Incentive Plan

 

Also in October 2000, the stockholders adopted an equity incentive plan (the Plan) providing for grants of incentive and nonqualified stock options and “other” stock compensation awards to employees of the Company and its subsidiaries, pursuant to which up to 3,500,000 shares of common stock are available for issuance. The stock options generally vest over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. Option activity under the Plan during the first three quarters of 2005, and full year 2004 is summarized below. There have been no “other” stock compensation awards granted under the Plan.

 

2005 Equity Incentive Plan

 

In June 2005, the stockholders adopted an equity incentive plan (the 2005 Plan) providing for grants of incentive and nonqualified stock options and “other” stock compensation awards to employees of the Company and its subsidiaries, pursuant to which up to 5,000,000 shares of common stock are available for issuance. The stock options generally vest over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. Award activity under the 2005 Plan during the second and third quarter of 2005 is summarized below. The Company awarded certain stock appreciation rights (SAR’s) during the second quarter under the Plan.

 

A summary of the Company’s stock award activity and related information under the Plan, the 2005 Plan and the Directors’ Plan for the 39-week period ended September 24, 2005 and year ended December 25, 2004 is provided below:

 

     Weighted-Average
Exercise Price


   Number of Shares

 
          (In Thousands)  

Outstanding at December 27, 2003

   $ 28.42    2,257  

Granted

     39.74    703  

Exercised

     17.12    (202 )

Canceled

     32.15    (33 )
           

Outstanding at December 25, 2004

     32.12    2,725  

Granted

     —      —    

Exercised

     21.29    (102 )

Canceled

     32.08    (19 )
           

Outstanding at March 26, 2005

     32.54    2,604  

Granted

     43.18    381  

Exercised

     18.70    (15 )

Canceled

     42.65    (8 )
           

Outstanding at June 25, 2005

     33.94    2,962  

Granted

     55.34    5  

Exercised

     19.50    (91 )

Canceled

     39.54    (4 )
           

Outstanding at September 24, 2005

     34.44    2,872  
           

 

The stated stock price for SAR’s issued is reflected in the above table as the exercise price.

 

12


Table of Contents

There were 5,000 and 690,329 awards granted during the 13-week periods ended September 24, 2005 and September 25, 2004, respectively.

 

The weighted-average remaining contract life for options outstanding at September 24, 2005 is 7.66 years. Options outstanding at September 24, 2005 have exercise prices ranging from $14.00 to $56.07. At September 24, 2005, options to purchase 886,939 shares are exercisable.

 

9. Warranty Reserves

 

The Company’s products sold are generally covered by a warranty for periods ranging from one to two years. The Company’s estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet. The following reconciliation provides an illustration of changes in the aggregate warranty reserve.

 

     13-Weeks Ended

 
     September 24,
2005


    September 25,
2004


 

Balance - beginning of the period

   $ 16,218     $ 12,379  

Accrual for products sold during the period

     3,250       6,084  

Expenditures

     (2,700 )     (5,028 )
    


 


Balance - end of the period

   $ 16,768     $ 13,435  
    


 


     39-Weeks Ended

 
     September 24,
2005


    September 25,
2004


 

Balance - beginning of the period

   $ 15,518     $ 8,399  

Accrual for products sold during the period

     13,879       18,562  

Expenditures

     (12,629 )     (13,526 )
    


 


Balance - end of the period

   $ 16,768     $ 13,435  
    


 


 

10. Commitments

 

Pursuant to certain supply agreements, the Company is contractually committed to make purchases of approximately $194 million over the next 3 years.

 

11. Recent Accounting Pronouncements

 

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”, which is a revision of SFAS No. 123. SFAS No.123 (R) will be effective for the Company during the first quarter of 2006 and requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. As permitted by SFAS No. 123, the company currently accounts for share-based payments to employees using APB Opinion No. 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options at the date of grant. Accordingly, the adoption of SFAS No.123(R)’s fair value method will have an impact on our results of operations consistent with our pro-forma disclosures included in Note 8, although it will have no impact on our overall financial position. The full impact of adoption of SFAS No.123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted SFAS No.123(R) in prior periods, the impact of that standard would have approximated the impact of SFAS No.123 as described in the disclosure of pro forma net income and earnings per share as noted above. SFAS No.123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption.

 

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Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The discussion set forth below, as well as other portions of this Quarterly Report, contains statements concerning potential future events. Such forward-looking statements are based upon assumptions by our management, as of the date of this Quarterly Report, including assumptions about risks and uncertainties faced by the Company. Readers can identify these forward-looking statements by their use of such verbs as expects, anticipates, believes or similar verbs or conjugations of such verbs. If any of our assumptions prove incorrect or should unanticipated circumstances arise, our actual results could materially differ from those anticipated by such forward-looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited to, those factors identified in the Company’s Annual Report on Form 10-K for the year ended December 25, 2004. This report has been filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) in Washington, D.C. and can be obtained by contacting the SEC’s public reference operations or obtaining it through the SEC’s web site on the World Wide Web at http://www.sec.gov. Readers are strongly encouraged to consider those factors when evaluating any forward-looking statement concerning the Company. The Company will not update any forward-looking statements in this Quarterly Report to reflect future events or developments.

 

The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in this Form 10-Q and the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 25, 2004.

 

The Company is a leading worldwide provider of navigation, communications and information devices, most of which are enabled by Global Positioning System, or GPS, technology. We operate in two business segments, the consumer and aviation markets. Both of our segments offer products through our network of independent dealers and distributors. However, the nature of products and types of customers for the two segments vary significantly. As such, the segments are managed separately. Our consumer segment includes portable GPS receivers and accessories for marine, recreation, land and automotive use sold primarily to retail outlets. Our aviation products are portable and panel-mount avionics for Visual Flight Rules and Instrument Flight Rules navigation and are sold primarily to retail outlets and certain aircraft manufacturers.

 

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Table of Contents

Results of Operations

 

The following table sets forth our results of operations as a percentage of net sales during the periods shown:

 

     13-Weeks Ended

 
     September 24, 2005

    September 25, 2004

 

Net sales

   100.0 %   100.0 %

Cost of goods sold

   48.5 %   42.3 %
    

 

Gross profit

   51.5 %   57.7 %

Research and development

   8.0 %   7.6 %

Selling, general and administrative

   9.6 %   10.3 %
    

 

Total operating expenses

   17.6 %   17.9 %
    

 

Operating income

   33.9 %   39.8 %

Other income (expense), net

   16.3 %   3.5 %
    

 

Income before income taxes

   50.2 %   43.3 %

Provision for income taxes

   9.4 %   8.6 %
    

 

Net income

   40.8 %   34.7 %
    

 

     39-Weeks Ended

 
     September 24, 2005

    September 25, 2004

 

Net sales

   100.0 %   100.0 %

Cost of goods sold

   47.4 %   46.4 %
    

 

Gross profit

   52.6 %   53.6 %

Research and development

   7.7 %   8.1 %

Selling, general and administrative

   11.0 %   10.3 %
    

 

Total operating expenses

   18.7 %   18.4 %
    

 

Operating income

   33.9 %   35.2 %

Other income (expense), net

   5.2 %   1.2 %
    

 

Income before income taxes

   39.1 %   36.4 %

Provision for income taxes

   7.5 %   7.3 %
    

 

Net income

   31.6 %   29.1 %
    

 

 

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Table of Contents

The following table sets forth our results of operations (in thousands) for each of our two segments through income before income taxes during the periods shown. For each line item in the table, the total of the consumer and aviation segments’ amounts equals the amount in the condensed consolidated statements of income included in Item 1.

 

     13-Weeks Ended

     September 24, 2005

   September 25, 2004

     Consumer

   Aviation

   Consumer

   Aviation

Net sales

   $ 190,692    $ 60,637    $ 145,481    $ 48,135

Cost of goods sold

     101,584      20,293      64,165      17,780
    

  

  

  

Gross profit

     89,108      40,344      81,316      30,355

Operating expenses:

                           

Selling, general and administrative

     18,944      5,236      15,485      4,374

Research and development

     11,187      8,929      7,513      7,182
    

  

  

  

Total operating expenses

     30,131      14,165      22,998      11,556
    

  

  

  

Operating income

     58,977      26,179      58,318      18,799

Other income (expense), net

     36,955      4,016      5,982      811
    

  

  

  

Income before income taxes

   $ 95,932    $ 30,195    $ 64,300    $ 19,610
    

  

  

  

     39-Weeks Ended

     September 24, 2005

   September 25, 2004

     Consumer

   Aviation

   Consumer

   Aviation

Net sales

   $ 538,433    $ 170,044    $ 417,330    $ 124,271

Cost of goods sold

     279,247      56,599      204,680      46,480
    

  

  

  

Gross profit

     259,186      113,445      212,650      77,791

Operating expenses:

                           

Selling, general and administrative

     61,545      16,245      42,597      13,305

Research and development

     29,335      25,527      21,985      21,640
    

  

  

  

Total operating expenses

     90,880      41,772      64,582      34,945
    

  

  

  

Operating income

     168,306      71,673      148,068      42,846

Other income (expense), net

     33,184      3,827      5,389      1,319
    

  

  

  

Income before income taxes

   $ 201,490    $ 75,500    $ 153,457    $ 44,165
    

  

  

  

 

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Table of Contents

Comparison of 13-Weeks Ended September 24, 2005 and September 25, 2004

 

Net Sales

 

     13-weeks ended September 24, 2005

    13-weeks ended September 25, 2004

    Quarter over Quarter

 
     Net Sales

   % of Revenues

    Net Sales

   % of Revenues

    $ Change

   % Change

 

Consumer

   $ 190,692    75.9 %   $ 145,481    75.1 %   $ 45,211    31.1 %

Aviation

     60,637    24.1 %     48,135    24.9 %   $ 12,502    26.0 %
    

  

 

  

 

  

Total

   $ 251,329    100.0 %   $ 193,616    100.0 %   $ 57,713    29.8 %
    

  

 

  

 

  

 

Increases in consumer sales for the 13-week period ended September 24, 2005 were primarily due a strong response to new automotive product offerings and secondarily to continued demand for recreation and fitness products. Increases in aviation sales were due to revenues from OEM, retrofit panel-mount, and portable products for the 13-week period ended September 24, 2005. Approximately 44% of sales in the third quarter of 2005 were generated from products introduced in the last twelve months.

 

Total consumer and aviation unit sales increased 31% to 708,000 in the third quarter of 2005 from 540,000 in the same period of 2004. The higher unit sales volume in the third quarter of fiscal 2005 was primarily attributable to the introduction of new products in the prior twelve months, most notably automotive products, as well as strength in our existing product lines.

 

Gross Profit

 

     13-weeks ended September 24, 2005

    13-weeks ended September 25, 2004

    Quarter over Quarter

 
     Gross Profit

   % of Revenues

    Gross Profit

   % of Revenues

    $ Change

   % Change

 

Consumer

   $ 89,108    46.7 %   $ 81,316    55.9 %   $ 7,792    9.6 %

Aviation

   $ 40,344    66.5 %     30,355    63.1 %     9,989    32.9 %
    

  

 

  

 

  

Total

   $ 129,452    51.5 %   $ 111,671    57.7 %   $ 17,781    15.9 %
    

  

 

  

 

  

 

Gross profit compression within the consumer segment in the quarter ended September 24, 2005, when compared to the same quarter in 2004, was driven primarily by automotive product revenues becoming a meaningfully larger portion of the product mix within the segment.

 

Aviation gross margin improvements were primarily a result of higher-margin products becoming a larger portion of the product mix and reduced G1000 cockpit program costs versus the same quarter of 2004.

 

Selling, General and Administrative Expenses

 

     13-weeks ended September 24, 2005

    13-weeks ended September 25, 2004

            
     Selling, General &          Selling, General &          Quarter over Quarter

 
     Admin. Expenses

   % of Revenues

    Admin. Expenses

   % of Revenues

    $ Change

   % Change

 

Consumer

   $ 18,944    9.9 %   $ 15,485    10.6 %   $ 3,459    22.3 %

Aviation

   $ 5,236    8.6 %     4,374    9.1 %     862    19.7 %
    

  

 

  

 

  

Total

   $ 24,180    9.6 %   $ 19,859    10.3 %   $ 4,321    21.8 %
    

  

 

  

 

  

 

The increase in expense was driven primarily by increased advertising costs ($2.3 million), finance and technology expenses ($0.5 million), increased call center expense ($0.3 million) and other administrative expenses ($1.2 million).

 

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Table of Contents

Research and Development Expense

 

     13-weeks ended September 24, 2005

    13-weeks ended September 25, 2004

            
     Research &
Development


   % of Revenues

    Research &
Development


   % of Revenues

    Quarter over Quarter

 
               $ Change

   % Change

 

Consumer

   $ 11,187    5.9 %   $ 7,513    5.2 %   $ 3,674    48.9 %

Aviation

     8,929    14.7 %     7,182    14.9 %     1,747    24.3 %
    

  

 

  

 

  

Total

   $ 20,116    8.0 %   $ 14,695    7.6 %   $ 5,421    36.9 %
    

  

 

  

 

  

 

The increase in expense was due to ongoing development activities for new products, the addition of 21 new engineering personnel to our staff during the quarter and an increase in engineering program costs during the third quarter of 2005 as a result of our continued emphasis on product innovation. Research and development costs as a percent of revenue increased primarily due to the fact that the growth rate of research and development expenditures for the period (37%) exceeded the growth rate of revenues (30%).

 

Operating Income

 

     13-weeks ended September 24, 2005

    13-weeks ended September 25, 2004

    Quarter over Quarter

 
     Operating Income

   % of Revenues

    Operating Income

   % of Revenues

    $ Change

   % Change

 

Consumer

   $ 58,977    30.9 %   $ 58,318    40.1 %   $ 659    1.1 %

Aviation

   $ 26,179    43.2 %     18,799    39.1 %     7,380    39.3 %
    

  

 

  

 

  

Total

   $ 85,156    33.9 %   $ 77,117    39.8 %   $ 8,039    10.4 %
    

  

 

  

 

  

 

Operating income fell as a percent of revenue as a result of products with lower margins becoming a larger portion of the product mix, increased advertising costs, finance, technology, and administrative expenditures, and increased call center costs.

 

Other Income (Expense)

 

     13-weeks ended
September 24, 2005


    13-weeks ended
September 25, 2004


 

Interest Income

   $ 4,726     $ 2,392  

Interest Expense

     (3 )     (10 )

Foreign Currency Exchange

     36,388       4,413  

Other

     (140 )     (2 )
    


 


Total

   $ 40,971     $ 6,793  
    


 


 

The average taxable equivalent interest rate return on invested cash during the third quarter of 2005 was 2.9% compared to 1.6% during the same quarter of 2004.

 

The $36.4 million currency gain was due to the strengthening of the U.S. Dollar compared to the Taiwan Dollar during the third quarter of fiscal 2005, when the exchange rate increased to 33.19 TD/USD at September 24, 2005 from 31.36 TD/USD at June 25, 2005. The $4.4 million currency gain in the same quarter of 2004 was due to the strengthening of the U.S. Dollar compared to the Taiwan Dollar during the third quarter of fiscal 2004, when the exchange rate increased to 33.99 TD/USD at September 25, 2004 from 33.68 TD/USD at June 26, 2004.

 

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Table of Contents

Income Tax Provision

 

Income tax expense increased by $6.8 million, to $23.6 million, for the 13-week period ended September 24, 2005 from $16.8 million for the 13-week period ended September 25, 2004 due to our higher income before taxes. The effective tax rate was 18.7% in the third quarter of 2005 and 20% in the third quarter of 2004.

 

Net Income

 

As a result of the above, net income increased 52.7% for the 13-week period ended September 24, 2005 to $102.5 million compared to $67.1 million for the 13-week period ended September 25, 2004.

 

Comparison of 39-weeks Ended September 24, 2005 and September 25, 2004

 

Net Sales

 

 

     39-weeks ended September 24, 2005

    39-weeks ended September 25, 2004

    Period over Period

 
     Net Sales

   % of Revenues

    Net Sales

   % of Revenues

    $ Change

   % Change

 

Consumer

   $ 538,433    76.0 %   $ 417,330    77.1 %   $ 121,103    29.0 %

Aviation

     170,044    24.0 %     124,271    22.9 %     45,773    36.8 %
    

  

 

  

 

  

Total

   $ 708,477    100.0 %   $ 541,601    100.0 %   $ 166,876    30.8 %
    

  

 

  

 

  

 

Increases in consumer sales dollars for the 39-week period ended September 24, 2005 were primarily due to a strong response to new automotive product offerings during the third quarter and secondarily to continued demand for recreation and fitness products throughout the period. Increases in aviation sales were due to revenues from OEM and retrofit panel-mount products and portable products for the 39-week period ended September 24, 2005. Aviation revenues as a percent of total revenue increased due to the fact that the growth rate of aviation revenues for the period (37%) exceeded the growth rate of the consumer segment (29%).

 

Total consumer and aviation unit sales increased 26% to 1,999,000 in the first nine months of 2005 from 1,587,000 in the same period of 2004. The higher unit sales volume year to date in fiscal 2005 was primarily attributable to the introduction of new products in the prior twelve months, as well as strength in our existing product lines. Unit growth occurred in both consumer and aviation segments.

 

Gross Profit

 

     39-weeks ended September 24, 2005

    39-weeks ended September 25, 2004

    Period over Period

 
     Gross Profit

   % of Revenues

    Gross Profit

   % of Revenues

    $ Change

   % Change

 

Consumer

   $ 259,186    48.1 %   $ 212,650    51.0 %   $ 46,536    21.9 %

Aviation

     113,445    66.7 %     77,791    62.6 %     35,654    45.8 %
    

  

 

  

 

  

Total

   $ 372,631    52.6 %   $ 290,441    53.6 %   $ 82,190    28.3 %
    

  

 

  

 

  

 

Gross profit declines within the consumer segment in the period ended September 24, 2005, when compared to the same quarter in 2004, were driven primarily by automotive product sales becoming a larger part of the mix within the segment.

 

Aviation gross margin improvements were primarily a result of products with higher margins becoming a higher portion of the product mix and reduced G1000 cockpit program costs versus the same period of 2004.

 

Selling, General and Administrative Expenses

 

     39-weeks ended September 24, 2005

    39-weeks ended September 25, 2004

            
     Selling, General &
Admin. Expenses


   % of Revenues

    Selling, General &
Admin. Expenses


   % of Revenues

    Period over Period

 
               $ Change

   % Change

 

Consumer

   $ 61,545    11.4 %   $ 42,597    10.2 %   $ 18,948    44.5 %

Aviation

   $ 16,245    9.6 %     13,305    10.7 %     2,940    22.1 %
    

  

 

  

 

  

Total

   $ 77,790    11.0 %   $ 55,902    10.3 %   $ 21,888    39.2 %
    

  

 

  

 

  

 

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The increase in expense was driven primarily by increased advertising costs ($12.2 million), certain operating taxes ($3.8 million), legal and accounting fees ($2.2 million), increased call center expense ($1.1 million) and other administrative expenses ($2.5 million).

 

Research and Development Expense

 

     39-weeks ended September 24, 2005

    39-weeks ended September 25, 2004

            
     Research &
Development


   % of Revenues

    Research &
Development


   % of Revenues

    Period over Period

 
               $ Change

   % Change

 

Consumer

   $ 29,335    5.4 %   $ 21,985    5.3 %   $ 7,350    33.4 %

Aviation

     25,527    15.0 %     21,640    17.4 %   $ 3,887    18.0 %
    

  

 

  

 

  

Total

   $ 54,862    7.7 %   $ 43,625    8.1 %   $ 11,237    25.8 %
    

  

 

  

 

  

 

The increase in expense was due to ongoing development activities for new products, the addition of 95 new engineering personnel to our staff year to date, and an increase in engineering program costs year to date in 2005 as a result of our continued emphasis on product innovation. Research and development costs as a percent of revenue declined primarily due to the fact that the growth rate of revenues for the period (31%) exceeded the growth rate of research and development expenditures (26%).

 

Operating Income

 

     39-weeks ended September 24, 2005

    39-weeks ended September 25, 2004

    Period over Period

 
     Operating Income

   % of Revenues

    Operating Income

   % of Revenues

    $ Change

   % Change

 

Consumer

   $ 168,306    31.3 %   $ 148,068    35.5 %   $ 20,238    13.7 %

Aviation

   $ 71,673    42.1 %     42,846    34.5 %     28,827    67.3 %
    

  

 

  

 

  

Total

   $ 239,979    33.9 %   $ 190,914    35.2 %   $ 49,065    25.7 %
    

  

 

  

 

  

 

Operating income fell as a percent of revenue as a result of product mix shift towards a higher percentage of revenue from automotive products with lower margins, as well as increased research and development costs, increased advertising and marketing costs, certain operating taxes, legal and accounting fees, and increased call center costs.

 

Other Income (Expense)

 

     39-weeks ended
September 24, 2005


    39-weeks ended
September 25, 2004


 

Interest Income

   $ 13,115     $ 6,304  

Interest Expense

     (46 )     (26 )

Foreign Currency Exchange

     23,784       470  

Other

     158       (40 )
    


 


Total

   $ 37,011     $ 6,708  
    


 


 

The average taxable equivalent interest rate return on invested cash during the 39-week period ending September 24, 2005 was 2.8% compared to 1.4% during the same period of 2004.

 

The $23.8 million currency gain was due to the strengthening of the U.S. Dollar compared to the Taiwan Dollar during the 39-week period ending September 24, 2005, when the exchange rate increased to 33.19 TD/USD at September 24, 2005 from 32.19 TD/USD at December 25, 2004. The $0.5 million currency gain in the same period of 2004 was due to the strengthening of the U.S. Dollar compared to the Taiwan Dollar during the 39-weeks ending September 25, 2004, when the exchange rate decreased to 33.99 TD/USD at September 25, 2004 from 34.05 TD/USD at December 27, 2003.

 

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Table of Contents

Income Tax Provision

 

Income tax expense increased by $13.4 million, to $52.9 million, for the 39-week period ended September 24, 2005 from $39.5 million for the 39-week period ended September 25, 2004 due to our higher income before taxes. The effective tax rate fell to 19.1% from 20.0% due to incremental tax holidays applied for in Taiwan during 2004 and year to date in 2005.

 

Net Income

 

As a result of the above, net income increased 41.7% for the 39-week period ended September 24, 2005 to $224.1 million compared to $158.1 million for the 39-week period ended September 25, 2004.

 

Liquidity and Capital Resources

 

Net cash generated by operating activities was $175.3 million for the 39-week period ended September 24, 2005 compared to $179.4 million for the 39-week period ended September 25, 2004. We attempt to carry sufficient inventory levels of finished goods and key components so that potential supplier shortages have as minimal an impact as possible on our ability to deliver our finished products. We experienced an $18.2 million year-to-date increase in net inventories in this 39-week period of 2005 in order to support the many new products slated for late 2005/early 2006 and meet demand for our products. Accounts receivable increased $41.7 million, net of bad debts during 2005 due to shipment of new products into the retail channel, resulting in the higher receivables balance at the end of the period.

 

Cash flow from investing activities during the 39-week period ending September 24, 2005 was a $71.0 million use of cash. Cash flow used in investing activities principally related to $20.5 million in capital expenditures primarily related to business operation and maintenance activities, the net purchase of $50.1 million of fixed income securities associated with the investment of our on-hand cash balances, and the purchase of intangible assets (license fees) of $0.4 million as a result of long-term agreements with key suppliers to achieve favorable pricing. It is management’s goal to invest the on-hand cash consistent with the Company’s investment policy, which has been approved by the Board of Directors. The investment policy’s primary purpose is to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of maximum safety. The Company’s average taxable equivalent return on its investments during the period was approximately 2.8%.

 

Cash flow from financing activities during the period was a $22.4 million use of cash, which represents a use of cash for share repurchase of $26.7 million and a source of cash resulting from the issuance of common stock related to our Company stock option plan of $4.2 million.

 

We currently use cash flow from operations to fund our capital expenditures and to support our working capital requirements. We expect that future cash requirements will principally be for capital expenditures, working capital requirements, repurchase of shares, and payment of dividends declared.

 

We believe that our existing cash balances and cash flow from operations will be sufficient to meet our projected capital expenditures, working capital, repurchase of shares, and other cash requirements at least through the end of fiscal 2005.

 

Contractual Obligations and Commercial Commitments

 

Pursuant to certain supply agreements, the Company is contractually committed to make purchases of approximately $194 million over the next 3 years.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

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Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Market Sensitivity

 

We have market risk primarily in connection with the pricing of our products and services and the purchase of raw materials. Product pricing and raw material costs are both significantly influenced by semiconductor market conditions. Historically, during cyclical economic downturns, we have been able to offset pricing declines for our products through a combination of introducing new products with higher margins and success in obtaining price reductions in raw material costs. In recent quarters we have experienced an increase in raw materials costs and an increase in the sale of lower-margin products as a part of the product mix, resulting in reduced gross margins.

 

Inflation

 

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.

 

Foreign Currency Exchange Rate Risk

 

The operation of the Company’s subsidiaries in international markets results in exposure to movements in currency exchange rates. The potential of volatile foreign exchange rate fluctuations in the future could have a significant effect on our results of operations.

 

The principal currency involved is the Taiwan Dollar. Garmin Corporation, located in Shijr, Taiwan, uses the local currency as its functional currency. The Company translates all assets and liabilities at year-end exchange rates and income and expense accounts at average rates during the year. In order to minimize the effect of the currency exchange fluctuations on our operations, we have elected to retain most of our cash at our Taiwan subsidiary in U.S. dollars. As discussed above, the exchange rate increased 5.8% during the first nine months of 2005 and resulted in a foreign currency gain of $23.8 million. If the exchange rate decreased by a similar percentage, a comparable foreign currency loss would be recognized.

 

Interest Rate Risk

 

As of September 24, 2005, we have minimal interest rate risk as we have no outstanding long term debt and we intend to hold marketable securities until they mature.

 

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Table of Contents
Item 4. Controls and Procedures

 

(a) Evaluation of disclosure controls and procedures. The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. As of September 24, 2005, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of September 24, 2005 that our disclosure controls and procedures were effective such that the information relating to the Company, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

(b) Changes in internal control over financial reporting. There has been no change in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended September 24, 2005 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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Table of Contents

Part II – Other Information

 

Item 1. Legal Proceedings

 

Encyclopedia Britannica, Inc. v. Alpine Electronics of America, Inc., Alpine Electronics, Inc., Denso Corporation, Toyota Motor Sales, U.S.A., Inc., American Honda Motor Co., Inc., and Garmin International, Inc. On May 16, 2005, Encyclopedia Britannica, Inc. filed suit in the United States District Court for the Western District of Texas, Austin Division, against the Company’s wholly owned subsidiary Garmin International, Inc. (“Garmin International”) and five other unrelated companies, alleging infringement of U.S. Patent No. 5,241,671. Garmin International has filed responsive pleadings and the parties have agreed to stay discovery pending a claim construction ruling by the court. Although there can be no assurance that an unfavorable outcome of this dispute would not have a material adverse effect on our operating results, liquidity or financial position, we believe that the claims are without merit and we will vigorously defend the action.

 

From time to time the Company is involved in other legal actions arising in the ordinary course of our business. We believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.

 

Item 2. Unregistered Sales of Equity Securities, and Use of Proceeds

 

Items (a) and (b) are not applicable.

 

(c) Issuer Purchases of Equity Securities

 

The Board of Directors approved a share repurchase program on April 21, 2004, authorizing the Company to purchase up to 3,000,000 shares of the Company as market and business conditions warrant. The share repurchase authorization expires on April 30, 2006. The following table lists the Company’s monthly share purchases during the third fiscal quarter of 2005:

 

Period


  

Total # of

Shares Purchased


  

Average Price

Paid Per Share


  

Total Number of Shares

Purchased as Part of

Publicly Announced

Plans or Programs


  

Maximum Number of

Shares That May Yet

Be Purchased Under

the Plans or Programs


September 2005

   352,200    $ 41.78    352,200    2,262,000
    
  

  
  

Total

   352,200    $ 41.78    352,200    2,262,000
    
  

  
  

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4. Submission of Matters to a Vote of Security Holders

 

None

 

Item 5. Other Information

 

Not applicable

 

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Table of Contents
Item 6. Exhibits

 

Exhibits     
Exhibit 31.1    Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
Exhibit 31.2    Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
Exhibit 32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibits 32.1 and 32.2 shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under
Section 18 of the Securities Exchange Act of 1934 and shall not be deemed to be incorporated by reference into
the filings of the Company under the Securities Act of 1933.

 

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Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

GARMIN LTD.

By  

/s/ Kevin Rauckman

   

Kevin Rauckman

    Chief Financial Officer
    (Principal Financial Officer and
Principal Accounting Officer)

 

Dated: November 2, 2005

 

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INDEX TO EXHIBITS

 

Exhibit No.

  

Description


Exhibit 31.1    Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
Exhibit 31.2    Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).
Exhibit 32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

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