GARMIN LTD [GRMN] Filings

10-Q 1 grmn-20210925.htm 10-Q 10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 25, 2021


☐	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)


Switzerland		98-0229227
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		identification no.)

Mühlentalstrasse 2
8200 Schaffhausen
Switzerland		N/A
(Address of principal executive offices)		(Zip Code)

Company’s telephone number, including area code: +41 52 630 1600

Securities registered pursuant to Section 12(b) of the Act:


Registered Shares, CHF 0.10 Per Share Par Value	GRMN	The Nasdaq Stock Market LLC
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)

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 ☑ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. YES ☐ NO ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ☑

Number of shares outstanding of the registrant’s common shares as of October 22, 2021

Registered Shares, CHF 0.10 par value: 192,322,049 (excluding treasury shares)

Garmin Ltd.

Form 10-Q

Quarter Ended September 25, 2021

Table of Contents


		Page

Part I - Financial Information		1

Item 1.	Condensed Consolidated Financial Statements	1

	Condensed Consolidated Balance Sheets at September 25, 2021 and December 26, 2020 (Unaudited)	1

	Condensed Consolidated Statements of Income for the 13-Weeks and 39-Weeks ended September 25, 2021 and September 26, 2020 (Unaudited)	2

	Condensed Consolidated Statements of Comprehensive Income for the 13-Weeks and 39-Weeks ended September 25, 2021 and September 26, 2020 (Unaudited)	3

	Condensed Consolidated Statements of Stockholders’ Equity for the 13-Weeks and 39-Weeks ended September 25, 2021 and September 26, 2020 (Unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the 39-Weeks ended September 25, 2021 and September 26, 2020 (Unaudited)	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

Part II - Other Information		26

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

Signature Page		29

Part I - Financial Information

Item I - Condensed Consolidated Financial Statements

Garmin Ltd. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except per share information)


	September 25, 2021			December 26, 2020
Assets
Current assets:
Cash and cash equivalents	$	1,639,056		$	1,458,442
Marketable securities		345,214			387,642
Accounts receivable, net		639,345			849,469
Inventories		1,113,503			762,084
Deferred costs		16,046			20,145
Prepaid expenses and other current assets		255,802			191,569
Total current assets		4,008,966			3,669,351

Property and equipment, net		974,981			855,539
Operating lease right-of-use assets		89,934			94,626
Marketable securities		1,253,589			1,131,175
Deferred income taxes		251,983			245,455
Noncurrent deferred costs		13,035			16,510
Intangible assets, net		809,163			828,566
Other assets		169,838			190,151
Total assets	$	7,571,489		$	7,031,373

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	318,604		$	258,885
Salaries and benefits payable		173,566			181,937
Accrued warranty costs		42,849			42,643
Accrued sales program costs		78,251			109,891
Deferred revenue		87,770			86,865
Accrued advertising expense		30,044			31,950
Other accrued expenses		146,426			149,817
Income taxes payable		109,862			68,585
Dividend payable		386,567			233,644
Total current liabilities		1,373,939			1,164,217

Deferred income taxes		127,733			116,844
Noncurrent income taxes		78,176			92,810
Noncurrent deferred revenue		42,022			49,934
Noncurrent operating lease liabilities		71,527			75,958
Other liabilities		23,354			15,494

Stockholders’ equity:
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 192,322 shares outstanding at September 25, 2021 and 191,571 shares outstanding at December 26, 2020		17,979			17,979
Additional paid-in capital		1,950,464			1,880,354
Treasury stock		(303,373	)		(320,016	)
Retained earnings		4,034,912			3,754,372
Accumulated other comprehensive income		154,756			183,427
Total stockholders’ equity		5,854,738			5,516,116
Total liabilities and stockholders’ equity	$	7,571,489		$	7,031,373

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(In thousands, except per share information)


	13-Weeks Ended					39-Weeks Ended
	September 25, 2021			September 26, 2020		September 25, 2021			September 26, 2020
Net sales	$	1,191,973		$	1,109,194	$	3,591,206		$	2,835,168
Cost of goods sold		496,026			441,211		1,472,852			1,144,816
Gross profit		695,947			667,983		2,118,354			1,690,352

Advertising expense		36,705			33,866		110,705			90,031
Selling, general and administrative expenses		162,515			142,134		485,896			411,335
Research and development expense		214,057			174,882		618,253			506,013
Total operating expense		413,277			350,882		1,214,854			1,007,379

Operating income		282,670			317,101		903,500			682,973
Other income (expense):
Interest income		6,897			7,777		21,568			30,258
Foreign currency (losses) gains		(15,014	)		10,113		(30,621	)		(9,802	)
Other income		833			1,726		3,511			8,515
Total other income (expense)		(7,284	)		19,616		(5,542	)		28,971

Income before income taxes		275,386			336,717		897,958			711,944
Income tax provision		16,347			23,300		101,894			53,168
Net income	$	259,039		$	313,417	$	796,064		$	658,776

Net income per share:
Basic	$	1.35		$	1.64	$	4.14		$	3.45
Diluted	$	1.34		$	1.63	$	4.13		$	3.44

Weighted average common shares outstanding:
Basic		192,322			191,234		192,123			191,021
Diluted		193,185			191,998		192,955			191,760

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)


	13-Weeks Ended					39-Weeks Ended
	September 25, 2021			September 26, 2020		September 25, 2021			September 26, 2020
Net income	$	259,039		$	313,417	$	796,064		$	658,776
Foreign currency translation adjustment		(8,702	)		26,721		(16,313	)		45,358
Change in fair value of available-for-sale marketable securities, net of deferred taxes		(3,169	)		2,528		(12,358	)		17,746
Comprehensive income	$	247,168		$	342,666	$	767,393		$	721,880

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the 13-Weeks Ended September 25, 2021 and September 26, 2020

(In thousands, except per share information)


	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at June 27, 2020	$	17,979	$	1,851,695		$	(326,310	)	$	3,107,768		$	89,729		$	4,740,861
Net income		—		—			—			313,417			—			313,417
Translation adjustment		—		—			—			—			26,721			26,721
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $31		—		—			—			—			2,528			2,528
Comprehensive income																342,666
Dividends declared		—		—			—			(26	)		—			(26	)
Issuance of treasury stock related to equity awards		—		(1,207	)		1,207			—			—			—
Stock compensation		—		22,031			—			—			—			22,031
Purchase of treasury stock related to equity awards		—		—			(1,191	)		—			—			(1,191	)
Balance at September 26, 2020	$	17,979	$	1,872,519		$	(326,294	)	$	3,421,159		$	118,978		$	5,104,341

	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at June 26, 2021	$	17,979	$	1,927,137		$	(303,369	)	$	3,775,874		$	166,627		$	5,584,248
Net income		—		—			—			259,039			—			259,039
Translation adjustment		—		—			—			—			(8,702	)		(8,702	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $609		—		—			—			—			(3,169	)		(3,169	)
Comprehensive income																247,168
Dividends declared		—		—			—			(1	)		—			(1	)
Issuance of treasury stock related to equity awards		—		(28	)		28			—			—			—
Stock compensation		—		23,355			—			—			—			23,355
Purchase of treasury stock related to equity awards		—		—			(32	)		—			—			(32	)
Balance at September 25, 2021	$	17,979	$	1,950,464		$	(303,373	)	$	4,034,912		$	154,756		$	5,854,738

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the 39-Weeks Ended September 25, 2021 and September 26, 2020

(In thousands, except per share information)


	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 28, 2019	$	17,979	$	1,835,622		$	(345,040	)	$	3,229,061		$	55,874		$	4,793,496
Net income		—		—			—			658,776			—			658,776
Translation adjustment		—		—			—			—			45,358			45,358
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $2,903		—		—			—			—			17,746			17,746
Comprehensive income																721,880
Dividends declared ($2.44 per share)		—		—			—			(466,678	)		—			(466,678	)
Issuance of treasury stock related to equity awards		—		(16,618	)		31,820			—			—			15,202
Stock compensation		—		53,515			—			—			—			53,515
Purchase of treasury stock related to equity awards		—		—			(13,074	)		—			—			(13,074	)
Balance at September 26, 2020	$	17,979	$	1,872,519		$	(326,294	)	$	3,421,159		$	118,978		$	5,104,341

	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 26, 2020	$	17,979	$	1,880,354		$	(320,016	)	$	3,754,372		$	183,427		$	5,516,116
Net income		—		—			—			796,064			—			796,064
Translation adjustment		—		—			—			—			(16,313	)		(16,313	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $2,918		—		—			—			—			(12,358	)		(12,358	)
Comprehensive income																767,393

GARMIN LTD [GRMN] Filings
10-Q	[2021-10-27]
10-Q	[2021-07-28]
10-Q	[2021-04-28]
10-K	[2021-02-17]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-29]
10-K	[2020-02-19]
10-Q	[2019-10-30]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-02-20]
10-Q	[2018-10-31]
10-Q	[2018-08-01]
10-Q	[2018-05-02]
10-K	[2018-02-21]
10-Q	[2017-11-01]
10-Q	[2017-08-02]
10-Q	[2017-05-03]
10-K	[2017-02-22]
10-Q	[2016-10-26]
10-Q	[2016-07-27]
10-Q	[2016-04-27]
10-K	[2016-02-17]
10-Q	[2015-10-28]
10-Q	[2015-07-29]
10-Q	[2015-04-29]
10-K	[2015-02-18]
10-Q	[2014-10-29]
10-Q	[2014-07-30]
10-Q	[2014-04-30]
10-K	[2014-02-19]
10-Q	[2013-10-30]
10-Q	[2013-08-07]
10-Q	[2013-05-08]
10-K	[2013-02-27]
10-Q	[2012-11-07]
10-Q	[2012-08-08]
10-Q	[2012-05-09]
10-K	[2012-02-29]