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Garmin Posts Record Gains

2/14/2007 11:24:00 AM Eastern

Cayman Islands — Garmin announced a record fourth quarter and fiscal year, ended Dec. 30, 2006, with revenues up 92 percent for the quarter and 73 percent for the year.

Total revenue for the quarter reached $611 million, up from $319 million in the fourth quarter of 2005, and revenue for the year hit $1.77 billion.

Net income more than doubled for the quarter to $180.3 million, up from $87.1 million for the period in 2005.For the year, net income hit $514.1 million, up from $311.2 million in 2005.

Garmin’s automobile/mobile sector posted the highest gains for all sectors, including aviation, outdoor and marine, for the fourth quarter, reporting revenue of $445 million, a 173 percent gain. For the year auto/mobile sales increased 170 percent to $1.1 billion.

The company said it expects auto/mobile revenues in 2007 to grow 50 percent, “with declining operating margins due to product mix and a continued transition toward mass-market levels,” according to a prepared statement.

Chairman/CEO Dr. Min Kao said, “2006 was truly a remarkable year for Garmin. We experienced triple-digit growth in our automotive product line, clearly demonstrating that our strategy effectively positions us to take advantage of the growing demand for portable navigation devices both in the U.S. and Europe.”

Garmin said all geographic areas were up in 2006, with North America seeing 66 percent growth to $1.1 billion and Europe up 88 percent to $593 million. Asia was also up 74 percent to $50 million.

On an earnings call today, Garmin said its new nuvi 680 is now shipping to Best Buy. The company noted that strong sales of high-end portable navigation devices helped to offset the general price erosion in the category.

Garmin will spend $150 million in advertising this year and $140 million in research and development. It will also add more than 250 engineering-related positions, it said.

The company spent $40 million in advertising in the fourth quarter 2006, up by $16 million from the third quarter.