GARMIN LTD [GRMN] Filings

10-Q 1 grmn-20240629.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 June 29, 2024


☐	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 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, $0.10 Per Share Par Value	GRMN	New York Stock Exchange
(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 July 26, 2024

Registered Shares, $0.10 par value: 192,213,829 (excluding treasury shares)

Garmin Ltd.

Form 10-Q

Quarter Ended June 29, 2024

Table of Contents


		Page

Part I - Financial Information		1

Item 1.	Condensed Consolidated Financial Statements	1

	Condensed Consolidated Statements of Income for the 13-Weeks and 26-Weeks ended June 29, 2024 and July 1, 2023 (Unaudited)	1

	Condensed Consolidated Statements of Comprehensive Income for the 13-Weeks and 26-Weeks ended June 29, 2024 and July 1, 2023 (Unaudited)	2

	Condensed Consolidated Balance Sheets at June 29, 2024 and December 30, 2023 (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the 26-Weeks ended June 29, 2024 and July 1, 2023 (Unaudited)	4

	Condensed Consolidated Statements of Stockholders’ Equity for the 13-Weeks and 26-Weeks ended June 29, 2024 and July 1, 2023 (Unaudited)	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

Part II - Other Information		24

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Mine Safety Disclosures	24

Item 5.	Other Information	25

Item 6.	Exhibits	26

Signature Page		27

Part I - Financial Information

Item I - Condensed Consolidated Financial Statements

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(In thousands, except per share information)


	13-Weeks Ended					26-Weeks Ended
	June 29, 2024			July 1, 2023		June 29, 2024			July 1, 2023
Net sales	$	1,506,671		$	1,320,795	$	2,888,320		$	2,468,219
Cost of goods sold		643,780			561,353		1,223,290			1,055,983
Gross profit		862,891			759,442		1,665,030			1,412,236

Research and development expense		243,151			224,394		485,686			445,878
Selling, general and administrative expenses		277,713			250,693		538,907			485,021
Total operating expense		520,864			475,087		1,024,593			930,899

Operating income		342,027			284,355		640,437			481,337
Other income (expense):
Interest income		29,286			18,760		54,313			34,659
Foreign currency (losses) gains		(4,828	)		10,797		(2,547	)		18,484
Other (expense) income		(513	)		2,064		809			3,268
Total other income (expense)		23,945			31,621		52,575			56,411

Income before income taxes		365,972			315,976		693,012			537,748
Income tax provision		65,342			28,037		116,421			47,482
Net income	$	300,630		$	287,939	$	576,591		$	490,266

Net income per share:
Basic	$	1.57		$	1.51	$	3.00		$	2.56
Diluted	$	1.56		$	1.50	$	2.99		$	2.56

Weighted average common shares outstanding:
Basic		192,074			191,293		191,982			191,395
Diluted		192,899			191,597		192,808			191,741

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)


	13-Weeks Ended						26-Weeks Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Net income	$	300,630		$	287,939		$	576,591		$	490,266
Foreign currency translation adjustment		(20,320	)		(25,342	)		(79,375	)		(8,451	)
Change in fair value of available-for-sale marketable securities, net of deferred taxes		4,382			(3,392	)		6,995			7,684
Comprehensive income	$	284,692		$	259,205		$	504,211		$	489,499

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)


	June 29, 2024			December 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	1,937,483		$	1,693,452
Marketable securities		288,659			274,618
Accounts receivable, net		808,446			815,243
Inventories		1,319,643			1,345,955
Deferred costs		20,946			16,316
Prepaid expenses and other current assets		322,041			318,556
Total current assets		4,697,218			4,464,140

Property and equipment, net of accumulated depreciation of $1,076,312 and $1,030,588		1,206,020			1,224,097
Operating lease right-of-use assets		130,302			143,724
Noncurrent marketable securities		1,192,190			1,125,191
Deferred income tax assets		777,019			754,635
Noncurrent deferred costs		8,921			11,057
Goodwill		599,606			608,474
Other intangible assets, net		168,392			186,601
Other noncurrent assets		103,654			85,650
Total assets	$	8,883,322		$	8,603,569

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	331,938		$	253,790
Salaries and benefits payable		172,284			190,014
Accrued warranty costs		58,253			55,738
Accrued sales program costs		90,191			98,610
Other accrued expenses		196,381			245,874
Deferred revenue		105,999			101,189
Income taxes payable		236,708			225,475
Dividend payable		432,569			139,997
Total current liabilities		1,624,323			1,310,687

Deferred income tax liabilities		102,951			114,682
Noncurrent income taxes payable		16,480			16,521
Noncurrent deferred revenue		31,848			36,148
Noncurrent operating lease liabilities		102,167			113,035
Other noncurrent liabilities		571			436

Stockholders’ equity:
Common shares (194,901 and 195,880 shares authorized and issued; 192,251 and 191,777 shares outstanding)		19,490			19,588
Additional paid-in capital		2,183,158			2,125,467
Treasury shares (2,650 and 4,103 shares)		(223,899	)		(330,909	)
Retained earnings		5,164,227			5,263,528
Accumulated other comprehensive income (loss)		(137,994	)		(65,614	)
Total stockholders’ equity		7,004,982			7,012,060
Total liabilities and stockholders’ equity	$	8,883,322		$	8,603,569

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	26-Weeks Ended
	June 29, 2024			July 1, 2023
Operating Activities:
Net income	$	576,591		$	490,266
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		67,890			64,816
Amortization		21,047			22,788
Loss (gain) on sale or disposal of property and equipment		128			(124	)
Unrealized foreign currency losses (gains)		3,165			(13,054	)
Deferred income taxes		(35,778	)		(68,859	)
Stock compensation expense		65,983			43,397
Realized loss on marketable securities		29			59
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net of allowance for doubtful accounts		(8,600	)		(62,832	)
Inventories		(11,368	)		111,531
Other current and noncurrent assets		(39,759	)		2,769
Accounts payable		92,065			45,206
Other current and noncurrent liabilities		(62,099	)		(39,484	)
Deferred revenue		667			4,711
Deferred costs		(2,516	)		(990	)
Income taxes		23,181			(47,288	)
Net cash provided by operating activities		690,626			552,912

Investing activities:
Purchases of property and equipment		(70,325	)		(99,346	)
Purchase of marketable securities		(281,297	)		(68,978	)
Redemption of marketable securities		203,775			98,885
Net cash from (payments for) acquisitions		5,011			—
Other investing activities, net		(321	)		(695	)
Net cash used in investing activities		(143,157	)		(70,134	)

Financing activities:
Dividends		(284,246	)		(279,442	)
Proceeds from issuance of treasury shares related to equity awards		24,530			21,946
Purchase of treasury shares related to equity awards		(16,264	)		(9,397	)
Purchase of treasury shares under share repurchase plan		(9,713	)		(70,181	)
Net cash used in financing activities		(285,693	)		(337,074	)

Effect of exchange rate changes on cash and cash equivalents		(17,761	)		599

Net increase in cash, cash equivalents, and restricted cash		244,015			146,303
Cash, cash equivalents, and restricted cash at beginning of period		1,694,156			1,279,912
Cash, cash equivalents, and restricted cash at end of period	$	1,938,171		$	1,426,215

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the 13-Weeks Ended June 29, 2024 and July 1, 2023

(In thousands)


	Common Shares			Additional Paid-In Capital			Treasury Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at April 1, 2023	$	17,979		$	2,048,339		$	(510,478	)	$	4,935,730		$	(86,566	)	$	6,405,004
Net income		—			—			—			287,939			—			287,939
Translation adjustment		—			—			—			—			(25,342	)		(25,342	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $974		—			—			—			—			(3,392	)		(3,392	)
Comprehensive income																	259,205
Dividends		—			—			—			(558,398	)		—			(558,398	)
Issuance of treasury shares related to equity awards		—			8,383			13,563			—			—			21,946
Stock compensation		—			22,665			—			—			—			22,665
Purchase of treasury shares related to equity awards		—			—			(228	)		—			—			(228	)
Purchase of treasury shares under share repurchase plan, including any associated excise tax		—			—			(26,372	)		—			—			(26,372	)
Cancellation of treasury shares		(238	)		—			200,827			(200,589	)		—			—
Share capital currency change		1,847			(1,847	)		—			—			—			—
Balance at July 1, 2023	$	19,588		$	2,077,540		$	(322,688	)	$	4,464,682		$	(115,300	)	$	6,123,822

	Common Shares			Additional Paid-In Capital			Treasury Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at March 30, 2024	$	19,490		$	2,135,384		$	(226,921	)	$	5,440,200		$	(122,056	)	$	7,246,097
Net income		—			—			—			300,630			—			300,630
Translation adjustment		—			—			—			—			(20,320	)		(20,320	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $1,385		—			—			—			—			4,382			4,382
Comprehensive income																	284,692
Dividends		—			—			—			(576,603	)		—			(576,603	)
Issuance of treasury shares related to equity awards		—			12,510			12,020			—			—			24,530
Stock compensation		—			35,264			—			—			—			35,264
Purchase of treasury shares related to equity awards		—			—			(277	)		—			—			(277	)
Purchase of treasury shares under share repurchase plan, including any associated excise tax		—			—			(8,721	)		—			—			(8,721	)
Cancellation of treasury shares					—			—			—			—			—
Share capital currency change		—			—			—			—			—			—
Balance at June 29, 2024	$	19,490		$	2,183,158		$	(223,899	)	$	5,164,227		$	(137,994	)	$	7,004,982

See accompanying notes.

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the 26-Weeks Ended June 29, 2024 and July 1, 2023

(In thousands)


	Common Shares			Additional Paid-In Capital			Treasury Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 2022	$	17,979		$	2,042,472		$	(475,095	)	$	4,733,517		$	(114,533	)	$	6,204,340
Net income		—			—			—			490,266			—			490,266
Translation adjustment		—			—			—			—			(8,451	)		(8,451	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $1,642		—			—			—			—			7,684			7,684
Comprehensive income																	489,499
Dividends		—			—			—			(558,512	)		—			(558,512	)
Issuance of treasury shares related to equity awards		—			(6,482	)		28,428			—			—			21,946
Stock compensation		—			43,397			—			—			—			43,397
Purchase of treasury shares related to equity awards		—			—			(9,397	)		—			—			(9,397	)
Purchase of treasury shares under share repurchase plan, including any associated excise tax		—			—			(67,451	)		—			—			(67,451	)
Cancellation of treasury shares		(238	)		—			200,827			(200,589	)		—			—
Share capital currency change		1,847			(1,847	)		—			—			—			—
Balance at July 1, 2023	$	19,588		$	2,077,540		$	(322,688	)	$	4,464,682		$	(115,300	)	$	6,123,822

	Common Shares			Additional Paid-In Capital			Treasury Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 30, 2023	$	19,588		$	2,125,467		$	(330,909	)	$	5,263,528		$	(65,614	)	$	7,012,060
Net income		—			—			—			576,591			—			576,591
Translation adjustment		—			—			—			—			(79,375	)		(79,375	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $2,196		—			—			—			—			6,995			6,995
Comprehensive income																	504,211
Dividends		—			—			—			(576,817	)		—			(576,817	)
Issuance of treasury shares related to equity awards		—			(8,292	)		32,822			—			—			24,530
Stock compensation		—			65,983			—			—			—			65,983
Purchase of treasury shares related to equity awards		—			—			(16,264	)		—			—			(16,264	)
Purchase of treasury shares under share repurchase plan, including any associated excise tax		—			—			(8,721	)		—			—			(8,721	)
Cancellation of treasury shares		(98	)		—			99,173			(99,075	)		—			—
Share capital currency change		—			—

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10-Q	[2023-08-02]
10-Q	[2023-05-03]
10-K	[2023-02-22]
10-Q	[2022-10-26]
10-Q	[2022-07-27]
10-Q	[2022-04-27]
10-K	[2022-02-16]
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]