Garmin Ltd. (NYSE:GRMN) Q4 2022 Earnings Conference Call February 22, 2023 10:30 AM ET Company Participants Teri Seck - Director IR Clifton Pemble - President and CEO Doug Boessen - CFO Conference Call Participants Paul Chung - JPMorgan George Wang - Barclays David MacGregor - Longbow Research Benjamin Bollin - Cleveland Research Company Erik Woodring - Morgan Stanley Ivan Feinseth - Tigress Financial Partners Operator Good morning, and thank you for standing by. Welcome to the Garmin Ltd. Fourth Quarte ...

Product Range and Innovation - Garmin offers a wide range of products across various segments, including fitness, outdoor, aviation, and marine, known for their value, high performance, and innovation [21]. - The fitness segment includes products such as the Forerunner series of running watches, which feature wrist-based heart rate monitoring and music storage capabilities [27]. - Garmin's outdoor products include adventure watches like the fēnix and Epix series, which offer features such as solar charging and preloaded topographical maps [30]. - In the aviation sector, Garmin provides integrated flight decks and avionics solutions for various aircraft categories, enhancing situational awareness and safety [32]. - Garmin's marine segment includes a broad range of recreational marine electronics, catering to diverse consumer needs [34]. - Garmin's products are designed to promote healthy and active lifestyles, with features that support fitness tracking and wellness monitoring [26]. - Garmin offers a wide range of marine products, including chartplotters, fishfinders, and autopilot systems, with advanced features such as wireless connectivity and real-time sonar imaging [35]. - The company has a strong emphasis on research and development, with over 1,800 patents issued globally, which supports its product innovation and competitive advantage [56]. Technology and Services - The company utilizes multiple global navigation satellite systems (GNSS) to improve product accuracy and performance, including GPS, GLONASS, and Galileo [22]. - Garmin's Connect IQ platform allows third-party developers to create applications for its devices, enhancing user experience and functionality [27]. - The company emphasizes subscription-based services, such as access to private satellite networks like Iridium, for global data communication [25]. Market Presence and Sales - Garmin's net sales through direct distribution channels accounted for greater than 10% of total net sales in 2022, indicating a significant online and direct retail presence [42]. - Garmin's fitness and outdoor products typically see higher sales in Q4 due to holiday demand, while marine and consumer auto products peak in Q2 [54]. - The company has established key relationships with automobile manufacturers for OEM solutions, providing integrated hardware and software for advanced driver-assistance systems [41]. Sustainability and Environmental Commitment - Garmin's environmental management systems are certified to ISO 14001, demonstrating its commitment to sustainability and compliance with environmental laws [60]. - The company has implemented strategies to reduce greenhouse gas emissions and increase the use of renewable electricity in its operations [61]. Workforce and Talent Management - The company focuses on attracting and retaining talent through career development opportunities and competitive compensation packages [62]. - As of December 31, 2022, Garmin had approximately 19,700 full and part-time employees worldwide, with 6,600 in the Americas, 10,500 in APAC, and 2,600 in EMEA [63]. - The engineering and development staff numbered approximately 5,500, while the manufacturing staff totaled around 8,900 as of December 31, 2022 [63]. - The Company offers a range of generous benefits to attract and retain talent, including stock compensation and employee development programs [65]. - Garmin's strategic aim includes engaging in STEM community outreach programs to encourage local students to pursue engineering careers [66]. Financial Performance and Risks - During fiscal year 2022, Garmin incurred a net foreign currency loss of $11.3 million, primarily due to the strengthening of the U.S. Dollar against several currencies [239]. - The U.S. Dollar strengthened 6.4% against the Australian Dollar and 12.7% against the Japanese Yen, resulting in losses of $8.9 million and $3.7 million, respectively [239]. - A hypothetical 10% adverse change in exchange rates for the Taiwan Dollar, Euro, and other currencies could have resulted in an adverse impact on income before income taxes of approximately $81 million [240]. - Garmin has no outstanding long-term debt as of December 31, 2022, thus no meaningful debt-related interest rate risk [241]. - A hypothetical 100 basis point increase in interest rates could have resulted in declines in portfolio fair market value of approximately $31 million as of December 31, 2022 [243]. - The Company has not recognized an allowance for credit losses on any securities in an unrealized loss position as of December 31, 2022 [242]. Competitive Landscape - Garmin's competitive landscape includes major players like Apple, Amazon, and Fitbit in the fitness sector, and Furuno and Raymarine in the marine products market [44].

Financial Data and Key Metrics Changes - Consolidated third quarter revenue was $1.14 billion, down 4% from the prior year, negatively impacted by approximately $70 million due to the strengthening of the U.S. dollar [8][10] - Gross margin increased to 58.8%, up 40 basis points from the prior year [10][28] - Operating income was $239 million, a decrease of 15% year-over-year, with an operating margin of 21% [10][28] - Full year revenue guidance adjusted to approximately $4.85 billion, a year-over-year decline of 3%, while full year EPS guidance raised to $4.95 [11][35] Business Segment Performance - **Fitness**: Revenue decreased 18% to $280 million, primarily due to lower sales of advanced wellness wearables [13] - **Outdoor**: Revenue increased 5% to $340 million, driven by growth in adventure watches and InReach devices [15] - **Aviation**: Revenue increased 4% to $188 million, with strong demand for aftermarket products [18] - **Marine**: Revenue decreased 5% to $197 million, reflecting seasonal trends [23] - **Auto**: Revenue decreased 2% to $136 million, with declines in consumer product lines [26] Market Data and Key Metrics Changes - The Americas region saw a 2% decline, while the EMEA region was negatively impacted by foreign exchange rates [29] - The APAC region experienced a 10% increase year-over-year, with a 19% increase when excluding foreign exchange impacts [29] Company Strategy and Industry Competition - The company is focusing on new product lines in Aviation, such as Autopilot systems, to gain market share [38] - In Fitness, the company aims to maintain competitive advantages through unique product features, such as extended battery life [46] - The Marine segment continues to innovate, receiving multiple awards for excellence [25] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the operating environment, particularly in light of inflation and supply chain issues [54] - The company is taking a wait-and-see approach for Q4, monitoring retail inventory levels and promotional strategies [52][62] Other Important Information - Free cash flow for the year is estimated at $450 million, with inventory expected to decrease sequentially by around 10% by year-end [49][33] - The effective tax rate for the quarter was reported at 4.3%, down from 5.9% in the prior quarter [34] Q&A Session Summary Question: Aviation segment performance and pricing power - Management highlighted new product lines in Aviation, such as Autopilot systems, contributing to revenue growth and market share [38][40] Question: Fitness segment margins and competition - Management noted improvements in Fitness margins due to product mix and emphasized unique differentiators against competitors like Apple and Google [44][46] Question: Free cash flow and inventory management - Management confirmed that inventory levels are reasonable, with expectations for a decrease by year-end [49][50] Question: Geopolitical risks and manufacturing footprint - Management stated that geopolitical risks are continuously evaluated, with the ability to establish new manufacturing capacity as needed [71] Question: Volume versus pricing impact on growth - Management indicated that balancing volume and pricing is crucial for maximizing profit, with ongoing assessments of product lifecycle [73]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2022 was $1.24 billion, a decrease of 6% from the previous year [9] - Operating profit was $293 million, down 21% year-over-year, with an operating margin of 23.6% [9][28] - The company anticipates full-year revenue of approximately $5 billion, flat compared to the prior year, and EPS of $4.90, representing a decline of about 16% [13][36] Business Segment Performance - **Fitness**: Revenue decreased 34% to $272 million, with gross and operating margins at 49% and 9%, respectively [14] - **Outdoor**: Revenue increased 18% to $382 million, with strong margins of 66% and 40%, resulting in operating income of $154 million [17] - **Aviation**: Revenue rose 13% to $205 million, with gross and operating margins at 72% and 30%, respectively [19] - **Marine**: Revenue decreased 7% to $243 million, with gross and operating margins at 57% and 28%, respectively [21] - **Auto**: Revenue decreased 6% to $139 million, with a gross margin of 40% and an operating loss of $15 million [24] Market Data and Key Metrics Changes - The Americas region contributed about half of the revenue for the quarter, remaining flat, while EMEA and APAC regions experienced declines due to foreign exchange rates [29] - The company faced significant headwinds from a stronger US dollar, impacting revenue by approximately $57 million [10] Company Strategy and Industry Competition - The company is focused on managing currency fluctuations by increasing prices where possible and introducing innovative products [11] - The diversified business model is seen as a strength, providing opportunities for growth across segments despite current challenges [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged supply chain constraints and the impact of the COVID-19 pandemic on performance, adjusting expectations for the remainder of the year [12][13] - The company remains optimistic about new product introductions and their potential to drive future growth [15][18] Other Important Information - The effective tax rate for Q2 was 7.6%, down from 14.8% in the prior year, primarily due to income mix by tax jurisdiction [35] - Free cash flow for Q2 was $5 million, a decrease of $115 million from the prior quarter [33] Q&A Session Summary Question: Fitness channel levels and demand feedback - Management noted that inventory levels for cycling computers are fine, but there is a backlog in indoor cycling products due to high retail inventory [40][42] Question: Aviation segment strength and margin outlook - The aviation segment saw growth in both OEM and aftermarket categories, with expectations for continued strength in the second half [44][46] Question: Outdoor business performance and user profile - The outdoor segment is expected to grow 20% for the year, with a healthy channel and a mix of new and upgrade users [48] Question: Inventory levels and holiday season outlook - Management is confident in their inventory strategy, ensuring they can meet demand while managing costs effectively [55][56] Question: Marine segment constraints and backlog - Constraints are primarily due to key components for chart-plotters, but progress is being made in addressing backorders [61] Question: Fitness gross margin expectations - Management indicated that gross margins in fitness may remain in the high 40s due to foreign exchange and freight impacts [65] Question: Expansion into aviation cockpit headsets - Management expressed excitement about the diesel headset and potential opportunities in aviation cockpits [69] Question: Long-term growth opportunities - Management is focused on managing for the long term while navigating current economic challenges [71] Question: Upcoming new product introductions - New products are planned across most segments, with management expressing excitement about future launches [72]

Q2 2022 Earnings July 27, 2022 Safe Harbor Statement These materials include projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as "anticipates," "would," "may," "expects," "estimates," "plans," "intends," "projects," and other words or phrases with similar meanings. Any statements regarding the Company's expected fiscal 2022 GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the Company's expected segment r ...

Garmin Ltd (NYSE:GRMN) Q1 2022 Earnings Conference Call April 27, 2022 10:30 AM ET Company Participants Teri Seck - Manager, IR Clifton Pemble - President, CEO & Director Douglas Boessen - CFO & Treasurer Conference Call Participants Paul Chung - JPMorgan Chase & Co. William Power - Robert W. Baird & Co. Nikolay Todorov - Longbow Research Jeffrey Rand - Deutsche Bank Benjamin Bollin - Cleveland Research Company Elizabeth Grenfell - Bank of America Merrill Lynch Erik Woodring - Morgan Stanley Operator Good d ...

Q1 2022 Earnings April 27, 2022 Safe Harbor Statement These materials include projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as "anticipates," "would," "may," "expects," "estimates," "plans," "intends," "projects," and other words or phrases with similar meanings. Any statements regarding the Company's expected fiscal 2022 GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the Company's expected segment ...

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $1.39 billion, a 3% increase year-over-year, marking a record for the company [7] - Operating profit was $315 million, down 15% from the previous year, with a gross margin decline attributed to higher freight costs [8] - For the full year, revenue increased 19% to nearly $5 billion, and operating income grew 16% to exceed $1.2 billion [8][27] Business Line Data and Key Metrics Changes - **Fitness Segment**: Revenue increased 16% for the year, but was flat in Q4 due to lower cycling revenue [12][14] - **Outdoor Segment**: Full year revenue increased 14%, but Q4 revenue decreased 8% due to component constraints [16] - **Aviation Segment**: Full year revenue increased 14%, with Q4 revenue up 13% driven by OEM growth [19] - **Marine Segment**: Revenue increased 33% for the year, with Q4 revenue up 14% [21] - **Auto Segment**: Full year revenue increased 26%, but recorded an operating loss of $71 million due to investments in OEM programs [23][25] Market Data and Key Metrics Changes - By geography, Q4 saw 8% growth in APAC and 5% in the Americas, while EMEA declined by 2% [29] - For the full year, APAC grew by 21%, Americas by 19%, and EMEA by 18% [30] Company Strategy and Development Direction - The company plans to introduce new products throughout the year, anticipating a consolidated revenue increase of approximately 10% to $5.5 billion [10] - A strategic focus on diversification is expected to drive growth opportunities [11] - The company is investing in manufacturing facilities and IT projects to support growth [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating component constraints through vertical integration and strong supplier relationships [43] - The pandemic has created a normalization in demand for certain products, but the company remains optimistic about growth in various segments [11][18] Other Important Information - The company proposed a 9% increase in dividends, subject to shareholder approval [10] - Changes in expense classification will provide a more meaningful representation of costs incurred to support R&D activities [36] Q&A Session Summary Question: Price increases in segments - Management indicated that price increases are being implemented across various segments, but the timing and impact will vary [40] Question: Navigating component constraints - Management highlighted their ability to redesign products and maintain good supplier relationships to manage component constraints [42] Question: Operating expenses outlook - Operating expenses are expected to increase as a percentage of sales, driven by IT costs and R&D investments [46] Question: Margin expectations - Management acknowledged that gross margins are expected to decline due to higher supply chain costs and foreign exchange impacts [52] Question: Outdoor segment growth confidence - Strong demand for new adventure watches is driving confidence in the outdoor segment's growth forecast [55] Question: Auto OEM investment impact - The company is focused on revenue growth in the auto OEM segment despite lower margins, with expectations of mid-to-high teen margins in the future [60][69] Question: Retail channel dynamics - Management noted that sell-through is strong, and they do not see significant imbalances in the retail channel [103] Question: Supply chain advantages - The company has benefited from supply chain challenges faced by competitors, allowing for better inventory management [104]

GARMIN. Q4 2021 and Fiscal Year Earnings February 16, 2022 Safe Harbor Statement These materials include projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as "anticipates," "would," "may," "expects," "estimates," "plans," "intends," "projects," and other words or phrases with similar meanings. Any statements regarding the Company's expected fiscal 2022 GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [☒] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 25, 2021 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 001-41118 GARMIN LTD. (Exact name of registrant as specified in its charter) Switzerland (State or other jurisdiction of incorporation or organi ...