Garmin Ltd. Announces Preliminary Third Quarter 2015 Results

Garmin Ltd. (Nasdaq: GRMN) today announced selected preliminary
financial information for its fiscal third quarter which ended September
26, 2015 and updated full year 2015 guidance.

The preliminary results of operations for the third quarter of fiscal
2015 and revised 2015 guidance represent the most current information
available to management. The Company’s actual results and 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 third quarter of fiscal 2015
are finalized.

Garmin expects to report third quarter 2015 revenue of approximately
$680 million. It is estimated that currency movements negatively
impacted sales by $52 million. On a year over year basis, fitness
revenue is expected to grow approximately 23% in the quarter. Marine
revenue is expected to be flat year over year after a seasonally strong
second quarter. Garmin expects fitness growth to be offset by declines
in the automotive segment as anticipated, and mid-single digit declines
in outdoor and aviation, which were weaker than anticipated.

Garmin expects to report third quarter 2015 gross margin of
approximately 53%. The year over year gross margin decline is driven by
geographic revenue mix shifting toward countries with weaker currencies
relative to the U.S. Dollar, and pricing dynamics, particularly in the
fitness segment. Operating margin is expected to be approximately 18.5%
as we continue to invest in research & development and advertising to
capitalize on strategic growth opportunities in new markets. The current
quarter tax rate is expected to be approximately 28% due to the
full-year impact of the reduced income projection for 2015. The
resulting third quarter GAAP diluted earnings per share (EPS) is
expected to be approximately $0.63. Excluding the impact of foreign
currency translation gains, pro forma diluted EPS(1) is
expected to be approximately $0.51 for the third quarter 2015.

“Given the global economic environment, revenue growth has proven
difficult to generate in 2015, while gross margin has been weaker than
our forecast due to geographic revenue mix and a competitive pricing
environment in certain product categories,” said Cliff Pemble, president
and chief executive officer (CEO) of Garmin Ltd. “While these dynamics
have created challenges for our business, we remain confident in our
plan to invest in advertising and research and development with an
emphasis on new products and new markets that will deliver solid results
for the long term.”

In light of the weaker than expected results through Q3, Garmin is
revising its 2015 outlook. For the full year, Garmin expects revenue of
approximately $2.8 billion, down from the previous guidance of $2.9
billion. We expect full year fitness growth to be approximately 15%,
down from the previous guidance of 25% in consideration of the
year-to-date results, the dynamics of the market, and in recognition
that the strong growth of fourth quarter 2014 will be more challenging
to repeat this year. Garmin is also revising its outlook for aviation
and now expects revenue for this segment to be flat for the year due to
recent weakness in the general aviation industry. Outdoor revenue is now
expected to be weaker than previously forecast at a decline of
approximately 4%. Auto and marine revenue assumptions remain in place.
Total company gross margin is expected to be approximately 53.5%. In
light of the revised revenue and margin outlook, Garmin expects an
operating margin of approximately 18.5%. Our full year tax rate is
expected to increase to 21.5% due to an unfavorable mix of profits by
taxing jurisdiction. Garmin now expects pro forma diluted EPS(1) of
approximately $2.25 for full year 2015, compared to prior guidance of
approximately $2.65. The pro forma diluted EPS guidance excludes the
impact of the year-to-date gains and losses associated with translation
of assets and liabilities held in non-functional currencies by our
global subsidiaries as shown in the table below.

Garmin will report third quarter 2015 results before the market opens
on Wednesday, October 28, 2015 and will hold a conference call for the
financial community at 10:30 a.m. ET that day to further discuss third
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 January 4, 2016
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 and
income tax adjustments that materially impact the effective tax rate, as
discussed below, is an important measure. The majority of the Company’s
consolidated foreign currency gain or loss result from transactions
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 U.S. dollars at the end of
each reporting period by the Company’s various non-U.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. The Company’s income tax expense is
periodically impacted by material net releases of reserves primarily
related to completion of audits and/or the expiration of statutes
effecting prior periods. Thus, reported income tax expense is not
reflective of the income tax expense that is incurred related to the
current period earnings. Accordingly, earnings per share before the
impact of foreign currency translation gain or loss and income tax
adjustments that materially impact the effective tax rate permits a
consistent comparison of the Company’s operating performance between

Reconciliation of Estimated GAAP Net Income per Diluted Share
to Non-GAAP Net Income per Diluted Share – Third Quarter 2015

13-Weeks Ended
Sept 26, 2015

GAAP net income per diluted share $0.63
Q3 foreign currency translation gain,
net of tax effects, per diluted share ($0.12 )
Pro forma net income per diluted share $0.51

Note: The net translation gain on assets and liabilities in the third
quarter of 2015 resulted primarily from the strengthening of the Taiwan
Dollar against the U.S. Dollar.

Reconciliation of GAAP Net Income per Diluted Share Guidance
to Non-GAAP Net Income per Diluted Share Guidance

Guidance for Fiscal
Year 2015

GAAP net income per diluted share $2.19
Year-to-date foreign currency translation loss,
net of tax effects, per diluted share $0.06
Pro forma net income per diluted share $2.25

Note: It is not practicable to forecast foreign currency translation
gains or losses for the fourth quarter of 2015.

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.



GarminTed Gartner, 913-397-8200