Form 8-K GARMIN LTD For: Oct 28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

Current Report Pursuant to Section 13 or 15(d) of

the Securities Act of 1934

 

 

Date of Report (Date of earliest event reported): October 28, 2015

 

GARMIN LTD.

(Exact name of registrant as specified in its charter)

 

Switzerland	0-31983	98-0229227
(State or other	(Commission	(I.R.S. Employer
jurisdiction	File Number)	Identification No.)
of incorporation)

 

Mühlentalstrasse 2

8200 Schaffhausen

Switzerland

(Address of principal executive offices)

 

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

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.02. Results of Operations and Financial Condition

 

On October 28, 2015, Garmin Ltd. (“the Company”) issued a press release announcing its financial results for the fiscal third quarter ended September 26, 2015. A copy of the press release is attached as Exhibit 99.1.

 

The information in Item 2.02 and Exhibit 99.1 to this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of Garmin Ltd. under the Securities Act of 1933, as amended, or the Exchange Act made after the date hereof, the information contained in Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Item 9.01. Financial Statements and Exhibits

 

(d)

Exhibits. The following exhibits are furnished herewith.

 

Exhibit No.		Description
99.1		Press Release dated October 28, 2015

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

GARMIN LTD.

 

October 28, 2015	/s/ Andrew R. Etkind
	Andrew R. Etkind
	Vice President, General Counsel and Corporate Secretary

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release dated October 28, 2015

 

 

Exhibit 99.1

 

 

Garmin Reports Third Quarter 2015 Results and Affirms Updated Guidance

 

Schaffhausen, Switzerland / October 28, 2015/ Business Wire

 

Garmin Ltd. (Nasdaq: GRMN – News) today announced results for the quarter ended September 26, 2015.

 

Summary items for the quarter and recent product announcements include:

 

·

Total revenue of $680 million in the third quarter of 2015 with fitness, outdoor, aviation and marine delivering 61% of total revenue

 

·

The relative strength of the US Dollar compared to other major currencies negatively impacted revenue by approximately $52 million, or 7%, in the third quarter of 2015

 

·

Gross and operating margins were 53% and 18.5%, respectively; gross margin was impacted by geographic revenue mix shifting toward countries with weaker currencies relative to the U.S. Dollar and lower average selling prices; operating margin was further impacted by strategic investments in R&D and advertising

 

·

Shipped approximately 3.9 million units in the quarter, a 4% increase over the year ago quarter

 

·

Pro forma EPS(1) of $0.51 for third quarter 2015

 

·

Announced new products available for the fourth quarter including fitness and wellness devices incorporating Garmin Elevate™ wrist-based heart rate technology and the babyCam™ serving a new product category

 

(in thousands,		13-Weeks Ended												39-Weeks Ended
except per share data)		Sept 26,				Sept 27,				Yr over Yr				Sept 26,				Sept 27,				Yr over Yr
		2015				2014				Change				2015				2014				Change
Net sales		$	679,690			$	706,283				-4	%		$	2,038,913			$	2,067,352				-1	%
Auto			264,643				307,558				-14	%			779,646				900,545				-13	%
Fitness			143,216				116,171				23	%			432,859				367,137				18	%
Outdoor			115,284				121,079				-5	%			301,523				311,123				-3	%
Aviation			94,232				99,347				-5	%			294,560				292,636				1	%
Marine			62,315				62,128				0	%			230,325				195,911				18	%
Gross profit %			53.3	%			56.4	%							55.2	%			56.8	%
Operating profit %			18.5	%			24.8	%							19.8	%			24.9	%
GAAP diluted EPS		$	0.63			$	(0.76	)			NM			$	1.69			$	0.79				NM
Pro forma diluted EPS (1)		$	0.51			$	0.76				-33	%		$	1.75			$	2.33				-25	%

 

(1) See attached table for reconciliation of non-GAAP measures including pro forma diluted EPS

 

Executive Overview from Cliff Pemble, President and Chief Executive Officer:

 

“The global economic environment and intensified competitive landscape have challenged our ability to repeat the strong financial performance of 2014,” said Cliff Pemble, president and chief executive officer (CEO) of Garmin Ltd.  “However, we have a solid plan to improve our results over the long term. Our plan includes compelling new products, some of which have already launched in the fourth quarter with many more to come in 2016. We look forward to once again meeting the expectations of our investors and ourselves while creating long-term sustainable value.”

 

 

Fitness:

 

 

The fitness segment posted revenue growth of 23% in the quarter. The sequential acceleration in growth reflects the strength of wellness, multisport, and cycling product offerings. Gross margin fell to 54% in the quarter, while operating margin declined to 19%. The gross margin decline was driven by both the unfavorable currency movements and a competitive pricing environment for certain product categories. The operating margin decline further reflects ongoing investment in advertising to support our long-term goals in the segment. We continue to view these investments as appropriate given the sizeable opportunity that exists in the global fitness and wellness markets. We recently introduced a new line-up of Forerunner® products including the 230, 235 and 630. The Forerunner 235 is Garmin’s first product to incorporate Garmin Elevate wrist-based heart rate monitoring technology. The Forerunner 630 builds off our prior advanced running watches with the addition of new running metrics and physiological measurements. Each of the new devices are compatible with Connect IQ™, our smartwatch platform. Also new for the fourth quarter is the vívosmart® HR, offering wrist-based heart rate via Garmin Elevate, along with an always-on display, smart notifications and activity intensity levels. To support these products and many others, we recently launched an update to Garmin Connect Mobile. The update offers a new modern and colorful interface, the ability to customize based on individual needs and improved social capabilities.

 

Outdoor:

 

The outdoor segment posted a 5% revenue decline in the quarter, due to geographic exposure to weak currencies. Gross and operating margins within the segment were largely consistent with the prior quarter at 59% and 33%, respectively. On a year-over-year basis, unfavorable currency movements, along with pricing and category mix created downward pressure on gross margin. In addition, we continue to invest in research and development to expand our product portfolio and explore new market opportunities which impacts operating margin. While some outdoor categories have slowed, we continue to see opportunities for growth in existing and adjacent categories in 2016 through innovation and exploration.

 

Aviation:

 

The aviation segment posted a revenue decline of 5% in the third quarter of 2015 as the general aviation market has slowed throughout the year. The gross margin in aviation remains strong at 74%, while operating margin declined year-over-year to 25% due to growth in research and development to support future revenue opportunities. As reported last quarter, overall general aviation industry trends are difficult due to volatile global markets. In the first half of the year, we were able to report revenue growth as industry trends were offset by market share gains. These share gains give us confidence that our growing R&D investment will generate revenue growth opportunities when the industry stabilizes or begins to grow again.

 

 

Marine:

 

The marine segment posted flat revenue in the quarter as the boating season came to a close and we compared against our third quarter 2014 acquisition of Fusion Electronics. Gross margin improved year-over-year to 55% in the quarter as mix shifted toward new products with higher margin profiles partially offset by unfavorable currency movements. Operating margin was 9% in the quarter, consistent with the prior year. Garmin was recently honored as the Manufacturer of the Year by NMEA (National Marine Electronics Associations). In addition to this important honor from NMEA, Garmin also won four product-specific awards in the autopilot, MFD (multi-function display) and smartphone applications categories. These awards speak to the strength and breadth of our innovative marine product line.

 

Auto:

 

 

The auto segment posted a revenue decline of 14% in the third quarter as PND sales continued to decline and the contribution of amortization of previously deferred revenue fell as expected. Gross and operating margins in the quarter were 43% and 12%, respectively, declining from the prior year. The gross margin decline resulted primarily from unfavorable currency movements. We recently introduced babyCam, an in-vehicle video monitor that transmits video wirelessly from the back seat of a vehicle to a compatible Garmin PND. The babyCam features night vision technology so parents can view children at night or in low-light situations.

 

Additional Financial Information:

 

Total operating expenses in the quarter were $237 million, a 6% increase from the prior year. Research and development investment increased 7% with continued emphasis on aviation and active lifestyle products in fitness and outdoor. Advertising increased 11% driven primarily by media, point-of-sale presence, and cooperative spending with key retailers to support wearables growth. Selling, general and administrative expense increased by 4% driven primarily by information technology and product support costs.

 

The effective tax rate in the third quarter of 2015 was 27.7% compared to a pro forma effective tax rate of 21.0% in the prior year when excluding the impact of the $308 million income tax expense associated with our inter-company restructuring and a $24 million income tax benefit associated with net releases of reserves primarily associated with specific uncertain tax positions. The year-over-year rate increase negatively impacted earnings per share by $0.05. The increase in the effective tax rate resulted from the reduced income projection for 2015, which negatively impacts our geographic income mix.

 

We continued to return cash to shareholders with our quarterly dividend of approximately $97 million and our share repurchase activity which totaled $51 million in the third quarter. We have $192 million remaining in the share repurchase program authorized through December 31, 2016, and expect to repurchase as conditions warrant. We ended the quarter with cash and marketable securities of over $2.4 billion.

 

2015 Guidance:

 

As pre-announced, 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% 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. We expect aviation revenue 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.  The result of these changes is expected pro forma EPS of approximately $2.25.

 

 

	2015 Updated Guidance
Revenue	~$2.8 B
Gross Margin	~53.5%
Operating Margin	~18.5%
Tax Rate	~21.5%
EPS (Pro Forma)	~$2.25

 

Webcast Information/Forward-Looking Statements:

 

The information for Garmin Ltd.’s earnings call is as follows:

 

	When:	Wednesday, October 28, 2015 at 10:30 a.m. Eastern
	Where:	http://www.garmin.com/aboutGarmin/invRelations/irCalendar.html
	How:	Simply log on to the web at the address above or call to listen in at 855-757-3897

 

An archive of the live webcast will be available until December 30, 2015 on the Garmin website at www.garmin.com. To access the replay, click on the Investor Relations link and click over to the Events Calendar page.

 

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 meanings. 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. The 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 http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

 

Garmin, Forerunner and vívosmart, are registered trademarks and Elevate, babyCam, and Connect IQ are trademarks of Garmin Ltd. or its subsidiaries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved.

 

Investor Relations Contact:	Media Relations Contact:
Kerri Thurston	Ted Gartner
913/397-8200	913/397-8200
[email protected]	[email protected]

 

 

Garmin Ltd. And Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(In thousands, except per share information)

 

		13-Weeks Ended								39-Weeks Ended
		Sept 26,				Sept 27,				Sept 26,				Sept 27,
		2015				2014				2015				2014
Net sales		$	679,690			$	706,283			$	2,038,913			$	2,067,352
Cost of goods sold			317,500				308,037				913,352				893,788
Gross profit			362,190				398,246				1,125,561				1,173,564
Advertising expense			36,887				33,112				110,352				92,457
Selling, general and administrative expense			94,057				90,632				290,359				272,914
Research and development expense			105,789				98,998				321,031				293,567
Total operating expense			236,733				222,742				721,742				658,938
Operating income			125,457				175,504				403,819				514,626
Other income (expense):
Interest income			6,851				9,344				22,295				28,781
Foreign currency gains (losses)			30,573				(12,703	)			(14,177	)			(20,266	)
Other income			2,010				517				2,707				707
Total other income (expense)			39,434				(2,842	)			10,825				9,222
Income before income taxes			164,891				172,662				414,644				523,848
Income tax provision			45,592				319,496				90,800				369,882
Net income (loss)		$	119,299			$	(146,834	)		$	323,844			$	153,966
Net income (loss) per share:
Basic		$	0.63			$	(0.76	)		$	1.69			$	0.79
Diluted		$	0.63			$	(0.76	)		$	1.69			$	0.79
Weighted average common shares outstanding:
Basic			190,342				192,239				191,068				193,700
Diluted			190,822				192,239				191,523				194,763

 

 

Garmin Ltd. And Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share information)

 

		(Unaudited)
		Sept 26,				December 27,
		2015				2014
Assets
Current assets:
Cash and cash equivalents		$	914,907			$	1,196,268
Marketable securities			211,834				167,989
Accounts receivable, net			431,942				570,191
Inventories, net			503,183				420,475
Deferred income taxes			49,857				56,102
Deferred costs			47,526				51,336
Prepaid expenses and other current assets			72,704				48,615
Total current assets			2,231,953				2,510,976
Property and equipment, net			439,094				430,887
Marketable securities			1,290,147				1,407,344
Restricted cash			259				308
Noncurrent deferred income tax			67,126				67,712
Noncurrent deferred costs			32,709				36,140
Intangible assets, net			220,848				218,083
Other assets			106,336				21,853
Total assets		$	4,388,472			$	4,693,303
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	158,663			$	149,094
Salaries and benefits payable			70,622				62,764
Accrued warranty costs			24,649				27,609
Accrued sales program costs			46,005				58,934
Deferred revenue			169,225				203,598
Accrued royalty costs			10,832				51,889
Accrued advertising expense			20,434				26,334
Other accrued expenses			70,741				67,780
Deferred income taxes			13,299				17,673
Income taxes payable			18,221				182,260
Dividend payable			291,965				185,326
Total current liabilities			894,656				1,033,261
Deferred income taxes			43,170				39,497
Non-current income taxes			96,311				80,611
Non-current deferred revenue			118,090				135,130
Other liabilities			1,560				1,437
Stockholders' equity:
Shares, CHF 10 par value, 208,077 shares authorized and issued; 190,342 shares outstanding at September 26, 2015 and 191,815 shares outstanding at December 27, 2014			1,797,435				1,797,435
Additional paid-in capital			89,879				73,521
Treasury stock			(425,380	)			(330,132	)
Retained earnings			1,795,900				1,859,972
Accumulated other comprehensive income			(23,149	)			2,571
Total stockholders' equity			3,234,685				3,403,367
Total liabilities and stockholders' equity		$	4,388,472			$	4,693,303

 

 

Garmin Ltd. And Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 

		39-Weeks Ended
		Sept 26,				Sept 27,
		2015				2014
Operating Activities:
Net income		$	323,844			$	153,966
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			37,936				35,860
Amortization			20,447				19,705
(Gain) loss on sale of property and equipment			(190	)			(742	)
Provision for doubtful accounts			(1,781	)			778
Deferred income taxes			5,796				55,235
Unrealized foreign currency loss			30,473				22,610
Provision for obsolete and slow moving inventories			9,925				21,051
Stock compensation expense			19,596				18,988
Realized (gain) loss on marketable securities			(76	)			685
Changes in operating assets and liabilities:
Accounts receivable			123,875				74,323
Inventories			(111,008	)			(107,273	)
Other current and non-current assets			(110,695	)			1,528
Accounts payable			16,864				(3,209	)
Other current and non-current liabilities			(44,636	)			(1,997	)
Deferred revenue			(49,790	)			(80,712	)
Deferred cost			7,080				11,136
Income taxes payable			(155,529	)			155,762
Net cash provided by operating activities			122,131				377,694
Investing activities:
Purchases of property and equipment			(53,297	)			(54,829	)
Proceeds from sale of property and equipment			670				748
Purchase of intangible assets			(2,817	)			(9,422	)
Purchase of marketable securities			(649,881	)			(746,305	)
Redemption of marketable securities			720,717				807,778
Proceeds from repayment on loan receivable			-				137,379
Change in restricted cash			48				(44	)
Acquisitions, net of cash acquired			(12,632	)			(18,871	)
Net cash provided by investing activities			2,808				116,434
Financing activities:
Dividends paid			(281,247	)			(268,023	)
Purchase of treasury stock under share repurchase plan			(108,057	)			(241,460	)
Purchase of treasury stock related to equity awards			(241	)			(11,274	)
Proceeds from issuance of treasury stock related to equity awards			8,554				12,761
Tax benefit from issuance of equity awards			1,257				4,422
Net cash used in financing activities			(379,734	)			(503,574	)
Effect of exchange rate changes on cash and cash equivalents			(26,566	)			(15,145	)
Net decrease in cash and cash equivalents			(281,361	)			(24,591	)
Cash and cash equivalents at beginning of period			1,196,268				1,179,149
Cash and cash equivalents at end of period		$	914,907			$	1,154,558

 

 

Garmin Ltd. And Subsidiaries

Net Sales, Gross Profit, and Operating Income by Segment (Unaudited)

 

		Reporting Segments
		Outdoor				Fitness				Marine				Auto				Aviation				Total
13-Weeks Ended September 26, 2015
Net sales		$	115,284			$	143,216			$	62,315			$	264,643			$	94,232			$	679,690
Gross profit		$	68,175			$	77,261			$	34,115			$	112,598			$	70,041			$	362,190
Operating income		$	37,761			$	26,577			$	5,737			$	31,660			$	23,722			$	125,457
13-Weeks Ended September 27, 2014
Net sales		$	121,079			$	116,171			$	62,128			$	307,558			$	99,347			$	706,283
Gross profit		$	79,227			$	74,056			$	31,510			$	140,995			$	72,458			$	398,246
Operating income		$	51,382			$	36,670			$	5,452			$	53,042			$	28,958			$	175,504
39-Weeks Ended September 26, 2015
Net sales		$	301,523			$	432,859			$	230,325			$	779,646			$	294,560			$	2,038,913
Gross profit		$	185,341			$	248,795			$	128,204			$	347,407			$	215,814			$	1,125,561
Operating income		$	99,012			$	94,286			$	34,204			$	99,010			$	77,307			$	403,819
39-Weeks Ended September 27, 2014
Net sales		$	311,123			$	367,137			$	195,911			$	900,545			$	292,636			$	2,067,352
Gross profit		$	194,805			$	236,204			$	105,097			$	422,379			$	215,079			$	1,173,564
Operating income		$	110,345			$	133,054			$	26,919			$	158,248			$	86,060			$	514,626

 

Garmin Ltd. And Subsidiaries

Net Sales by Geography (Unaudited)

 

		13-Weeks Ended												39-Weeks Ended
		Sept 26,				Sept 27,				Yr over Yr				Sept 26,				Sept 27,				Yr over Yr
		2015				2014				Change				2015				2014				Change
Net sales		$	679,690			$	706,283				-4	%		$	2,038,913			$	2,067,352				-1	%
Americas			335,041				374,111				-10	%			1,057,359				1,090,267				-3	%
EMEA			261,548				260,830				0	%			744,352				781,860				-5	%
APAC			83,101				71,342				16	%			237,202				195,225				22	%

 

EMEA - Europe, Middle East and Africa; APAC - Asia Pacific

 

 

Non-GAAP Financial Information

 

Pro Forma net income (earnings) per share

 

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 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. 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. The net release of other uncertain tax position reserves, amounting to approximately $7 million and $11 million for the 39-weeks ended September 26, 2015 and September 27, 2014, respectively, have not been included as pro forma adjustments in the following presentation of pro forma net income as such amounts have been considered immaterial, tend to be more recurring in nature and are comparable between periods. In the third quarter of 2014, the company incurred tax expense of $308 million associated with our inter-company restructuring. As this is a one-time transaction and not reflective of income tax expense incurred related to the current period earnings, it has been excluded from pro forma net income (earnings) per share. 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 periods.

 

Garmin Ltd. And Subsidiaries

Net income per share (Pro Forma)

(in thousands, except per share information)

 

		13-Weeks Ended								39-weeks Ended
		Sept 26,				Sept 27,				Sept 26,				Sept 27,
		2015				2014				2015				2014
Net Income (Loss) (GAAP)		$	119,299			$	(146,834	)		$	323,844			$	153,966
Foreign currency (gain) / loss, net of tax effects		$	(22,120	)		$	10,035			$	11,073			$	16,957
Income tax benefit due to completion of tax audits and/or expiration of statutes			-			$	(24,400	)			-			$	(24,400	)
Tax due to inter-company restructuring			-			$	307,635				-			$	307,635
Net income (Pro Forma)		$	97,179			$	146,436			$	334,917			$	454,158
Net income (loss) per share (GAAP):
Basic		$	0.63			$	(0.76	)		$	1.69			$	0.79
Diluted		$	0.63			$	(0.76	)		$	1.69			$	0.79
Net income per share (Pro Forma):
Basic		$	0.51			$	0.76			$	1.75			$	2.34
Diluted		$	0.51			$	0.76			$	1.75			$	2.33
Weighted average common shares outstanding:
Basic			190,342				192,239				191,068				193,700
Diluted (GAAP) (1)			190,822				192,239				191,523				194,763
Diluted (Pro Forma)			190,822				193,341				191,523				194,763
(1) Per US GAAP, dilutive shares are excluded from the calculation of GAAP EPS in a net loss position as the dilutive impact becomes anti-dilutive, reducing the loss per share.

 

Free cash flow

 

Management believes that free cash flow is an important financial measure because it represents the amount of cash provided by operations that is available for investing and defines it as operating cash flow plus one-time cash payments associated with our inter-company restructuring less capital expenditures for property and equipment.

 

Garmin Ltd. And Subsidiaries

Free Cash Flow

(in thousands)

 

		13-Weeks Ended								39-weeks Ended
		Sept 26,				Sept 27,				Sept 26,				Sept 27,
		2015				2014				2015				2014
Net cash provided by operating activities		$	137,834			$	142,342			$	122,131			$	377,694
Less: purchases of property and equipment		$	(13,565	)		$	(18,066	)		$	(53,297	)		$	(54,829	)
Plus: taxes paid related to inter-company restructuring			-			$	78,137			$	182,800			$	78,137
Free Cash Flow		$	124,269			$	202,413			$	251,634			$	401,002

 

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