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Garmin Posts Revenue Increase, Flat Margin

Switzerland – Garmin reported a revenue increase of 9 percent in its
second-quarter results, ended June 26.

Total revenue was $729
million, up 9 percent from $669 million in second quarter 2009, with all
segments posting growth, according to the company.  

The automotive/mobile
segment saw its revenue increase 2 percent to $447 million, while the outdoor/fitness
segment increased 32 percent to $143 million. Aviation segment revenue
increased 1 percent to $65 million, and marine segment revenue increased 23
percent to $74 million.

Garmin said that units
shipped also increased by 8 percent year over year, to 4 million units.

Gross margin was flat at
54 percent, compared with 54 percent in the previous quarter and 53 percent in
the prior-year period.

Operating margin dropped
2 percent when compared with the prior year —   28 percent vs. 30 percent. It did improve
from 19 percent in first quarter of 2010

Dr. Min Kao, chairman
and CEO of Garmin, said in a statement: “The automotive/mobile segment posted
growth in the second quarter as OEM and mobile initiatives contributed to the
increase. Both pricing and margins in the quarter were on target with our
expectations. PND pricing has shown signs of stabilizing, with a decline of
only 6 percent year over year, and cost reduction efforts largely offset the
declines, resulting in stable year-over-year margins.

“Late in the quarter, we
began delivery of the 3700 series of Nuvis and are excited by the initial
reception from both our customers and consumers. In the quarter, we also
launched the Garminfone A50 with T-Mobile and the Nüvifone A10 with Optus in
Australia. Sales of our smartphone product category contributed $27 million in
revenue during the quarter. While this was below our plan, we are working
aggressively with T-Mobile and other carriers around the globe on the
appropriate positioning and pricing of our devices in the competitive
smartphone space.”