Garmin Reports Record Q1

By Amy Gilroy -- TWICE, 5/2/2007

Cayman Islands — Garmin reported a record first quarter with revenue up 53 percent to $492 million driven by strong sales of personal navigation devices (PNDs).

Chairman and CEO Dr. Min Kao said revenue growth exceeded company expectations and that Garmin is ramping up production to meet demand for its automotive/mobile products.

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The company expects to reach a capacity of 12 million units up from its current production level of 8 million units in its Taiwan facility. Garmin is also looking to purchase an additional manufacturing facility in Europe and has expanded its facility in the United Kingdom.

For the quarter, Garmin’s net income increased to $139,860, from $87,516 for the period last year.

The company reported sales of 1.55 million GPS units across all sectors including automotive/mobile, aviation, outdoor/fitness and marine, up 67 percent over the period last year.

Sales in the automotive/mobile segment, which includes PNDs, increased 110 percent to $317 million, with the majority of those sales in the United States. Sales in this sector now represent 64 percent of Garmin’s revenue, up from last year.

While the company had higher than expected margins in PNDs this quarter due to strong sales of fully featured product, it expects margins will decline as the market moves toward mass-market pricing and as products such as the newly released, lower-priced Garmin nuvi 200 series become more popular.

Garmin expects that in 2007 about half its PND sales will fall in the low-end sector of the market and the other half will fall in the mid and high-end sectors, it said during an earnings call today.

In other product categories, Garmin said revenue from its aviation GPS sales increased 26 percent to $72 million during the first quarter. Outdoor/fitness revenues declined 5 percent to $60 million, and marine revenues declined 15 percent to $43 million. Revenues in the latter two categories are expected to improve as new products are introduced in these segments later this year, said Garmin.