Garmin® Ltd. Announces Preliminary Second Quarter 2015 Results and Updates Full Year 2015 Guidance

Garmin Ltd. (Nasdaq: GRMN) today announced selected preliminary
financial information for its fiscal second quarter which ended June 27,
2015 and updated full year 2015 guidance.

The preliminary results of operations for the second quarter of fiscal
2015 represent the most current information available to management. The
Company’s actual results and full year 2015 guidance may differ
materially from these preliminary results due to the completion of the
company’s financial closing procedures, final adjustments and other
developments that may arise between the date of this press release and
the time that financial results for the second quarter of fiscal 2015
are finalized.

Garmin expects to report second quarter 2015 revenue in the range of
$770-775 million with a gross margin of approximately 54%. The
year-over-year decline was driven primarily by currency movements
negatively impacting sales by $55-60 million year-over-year on a
constant currency basis across all consumer segments and a more
promotional pricing environment in the fitness segment. Operating margin
is expected to be approximately 21.5% as we continue to invest in
research & development and advertising. Given an increased tax rate in
the quarter, the resulting second quarter diluted earnings per share
(EPS) is expected to be in the range of $0.70-0.72. Garmin does not
expect any material non-GAAP adjustments to EPS.

Garmin expects to report second quarter 2015 revenue growth in the
fitness segment of approximately 5%. The sequential slowdown in fitness
revenue growth resulted primarily from the strong channel fill in second
quarter 2014. Although our sell-in growth was muted, we believe that
sell-through volumes across much of our fitness portfolio continue to
grow at a more robust pace in 2015. The reduced revenue growth in the
quarter, along with promotional pricing, increased advertising
investment, and the unfavorable currency movements impacted the
operating margin in the fitness segment which we expect to be
approximately 21%. Also, Garmin expects to report marine revenue growth
for the second quarter of 2015 of approximately 40% due to the strength
of our new product introductions and related market share gains.

“Revenue performance was in line with our expectations in light of the
difficult currency environment caused by a stronger US dollar. However,
ongoing weakness of the Euro coupled with a stronger Taiwan Dollar has
created further gross margin pressure. Additionally, the current
competitive environment in the fitness market necessitates more
aggressive pricing with higher advertising expenses,” said Cliff Pemble,
president and chief executive officer (CEO) of Garmin Ltd. ”We are
revising our full year outlook to reflect the dynamics we face in the
current operating environment.”

For the full year, Garmin continues to expect revenue of approximately
$2.9 billion, unchanged from prior guidance. While fitness growth slowed
in the second quarter, we expect that it will improve in the second half
as sell-through trends continue to show growth, we launch new products
and we recognize benefits from our advertising investments. Thus, we
still anticipate full year fitness growth of approximately 25%. Total
company gross margin is expected to be in the range of 54-55% driven
primarily by currency movements and promotional pricing. Previously,
gross margin was expected to be approximately 56%. With expected
increased investments in advertising and research & development, Garmin
expects an operating margin in the range of 20-21% compared to prior
guidance of 23%. Given an effective tax rate of 18-19%, Garmin now
expects pro forma diluted EPS(1) of approximately $2.65 for
full year 2015, compared to prior guidance of $3.10. The pro forma EPS
excludes the impact of the first quarter loss associated with
translation of assets and liabilities held in non-functional currencies
by our global subsidiaries as shown in the table below. We do not expect
a material gain or loss related to translation adjustments for the
second quarter of fiscal 2015 and it is not practicable to forecast
similar gains or losses for the second half of 2015.

Garmin will report second quarter 2015 results before the market opens
on Wednesday, July 29, 2015 and will hold a conference call for the
financial community at 10:30 a.m. ET that day to further discuss second
quarter financial results and full year expectations which may include a
discussion of other forward-looking and material information about
business and financial matters.

Garmin will webcast the conference call which will be available at
An archive of the live webcast will be available until October 1, 2015
on the Garmin website at
To access the replay, click on the Investor Relations link and click
over to the Events Calendar page.

(1) Pro Forma EPS: Management believes that net income per
share before the impact of foreign currency translation gain or loss, as
discussed below, is an important measure. The majority of the Company’s
consolidated foreign currency gain or loss result from balances
involving the Euro, the British Pound Sterling and the Taiwan Dollar and
from the exchange rate impact of the significant cash and marketable
securities, receivables and payables held in a currency other than the
functional currency at one of the Company’s subsidiaries. Such gain or
loss is required under GAAP because the functional currency of the
subsidiaries differs from the currency in which various assets and
liabilities are held. However, there is minimal cash impact from such
foreign currency gain or loss. Accordingly, earnings per share before
the impact of foreign currency translation gain or loss permits a
consistent comparison of the Company’s operating performance between

Reconciliation of GAAP Net Income per Diluted Share Guidance
to Non-GAAP Income per Diluted Share Guidance
Guidance for Fiscal
Year 2015
GAAP net income per diluted share $2.45
First quarter foreign currency translation loss,
net of tax effects, per diluted share $0.20
Pro forma net income per diluted share $2.65

This release includes projections and other forward-looking
statements regarding Garmin Ltd. and its business that are commonly
identified by words such as “would”, “may”, “expects”, “estimates”,
“plans”, “intends”, “projects”, and other words or phrases with similar
Any statements regarding the Company’s GAAP and pro
forma estimated earnings, EPS and revenue for fiscal 2015, the Company’s
expected segment revenue growth rates, margins, currency movements,
expenses, pricing, new products to be introduced in 2015 and the
Company’s plans and objectives are forward-looking statements.
forward-looking events and circumstances discussed in this release may
not occur and actual results could differ materially as a result of risk
factors and uncertainties affecting Garmin, including, but not limited
to, the risk factors that are described in the Annual Report on Form
10-K for the year ended December 27, 2014 filed by Garmin with the
Securities and Exchange Commission (Commission file number 0-31983). A
copy of Garmin’s 2014 Form 10-K can be downloaded from

About Garmin

For over 25 years, Garmin has pioneered new GPS navigation and wireless
devices and applications that are designed for people who live an active
lifestyle. Garmin serves five primary business units, including
automotive, aviation, fitness, marine, and outdoor recreation. For more
information, visit Garmin’s virtual pressroom at,
contact the Media Relations department at 913-397-8200, or follow us at,,

Garmin Ltd. is incorporated in Switzerland, and its principal
subsidiaries are located in the United States, Taiwan and the United
Kingdom. Garmin is a registered trademark.


Garmin International, Inc.Investor Relations:Kerri Thurston, [email protected]