Garmin Ltd.

Garmin Reports Record Third Quarter, Raises Guidance; Announces Management Appointment; Announces Intention to Make Offer to Purchase all the Outstanding Shares of Tele Atlas N.V.

    Cayman Islands (ots/PRNewswire) -

    Garmin Ltd. (Nasdaq: GRMN) today announced a record quarter ended September 29, 2007.

@@start.t1@@      Third Quarter 2007 Financial highlights:
      -- Total revenue of US$729 million, up 79% from US$408 million in third
          quarter 2006
      -- Automotive/Mobile segment revenue increased 118% to US$519 million in
          third quarter 2007
      -- Aviation segment revenue increased 27% to US$74 million in third
          quarter 2007
      -- Outdoor/Fitness segment revenue increased 24% to US$88 million in
          third quarter 2007
      -- Marine segment revenue increased 17% to US$48 million in third quarter
          2007
      -- All geographic areas experienced significant growth:
          - North America revenue was US$454 million compared to US$265 million,
              up 71%
          - Europe revenue was US$227 million compared to US$120 million, up 89%
          - Asia revenue was US$48 million compared to US$23 million, up 109%
      -- Revenue from our automotive/mobile segment continued to become a
          larger portion of total company revenues when compared with the same
          quarter in 2006, at 71% of total revenues.
      -- Diluted earnings per share increased 57% to US$0.88 from US$0.56 in
          third quarter 2006; excluding foreign exchange, EPS increased 78% to
          US$0.89 from US$0.50 in the same quarter in 2006.
      Year-to-Date 2007 Financial highlights:
      -- Total revenue of US$1.96 billion, up 69% from US$1.16 billion year-to-
          date 2006
      -- Automotive/Mobile segment revenue increased 109% to US$1.34 billion in
          year-to-date 2007
      -- Aviation segment revenue increased 30% to US$224 million in year-to-
          date 2007
      -- Outdoor/Fitness segment revenue increased 10% to US$225 million in
          year-to-date 2007
      -- Marine segment revenue increased 21% to US$170 million in year-to-date
          2007
      -- All geographic areas experienced significant growth:
          - North America revenue was US$1.23 billion compared to US$700
              million, up 76%
          - Europe revenue was US$631 million compared to US$400 million, up 58%
          - Asia revenue was US$101 million compared to US$63 million, up 60%
      -- Diluted earnings per share increased 64% to US$2.50 from US$1.52 in
          year-to-date 2006; excluding foreign exchange, EPS increased 68% to
          US$2.48 from US$1.48 in the same period in 2006.
      Business highlights:
      -- Strong sales in our automotive/mobile segment continue to exceed our
          expectations and drive our increased guidance for the remainder of
          2007.
      -- Aviation and marine segment results put them on track to meet or
          exceed earlier full year guidance for these segments.  Given
          improving sales in our outdoor/fitness segment, we continue to
          anticipate this segment will reach our full year guidance with
          seasonally strong holiday sales.
      -- 2.69 million units sold in the third quarter of 2007, up 119% from the
          same quarter in 2006; year-to-date units sold increased 97% from the
          same period in 2006.
      -- Completed the initial build-out of our third Taiwan manufacturing
          facility, increasing the number of production lines from 31 to 37, and
          production capacity at the end of the third quarter to an annual run
          rate of approximately 16 million units.    Expansion of our R&D and
          other office space in Taiwan continues.
      -- Expansion of our North American warehouse in Olathe, Kansas continues,
          with expected completion in Q1 2008.
      -- We continued to work to increase our retail penetration and broaden
          our distribution as retailers laid the groundwork for the upcoming
          holiday selling season.    Our initial order book for the holiday
          season is strong, as PNDs are positioned to be a popular item during
          the holiday season.
      -- Due diligence work continues on previously announced acquisitions of
          distributors in Spain, Italy, and Denmark.    These activities are part
          of our ongoing efforts to improve our market share in Europe.@@end@@

    (Logo: http://www.newscom.com/cgi-bin/prnh/20061026/CGTH082LOGO)

    Executive overview from Dr. Min Kao, Chairman and Chief Executive Officer:

    "Garmin experienced a solid third quarter. Our continued strong growth in the automotive/mobile segment demonstrated that our products are well-positioned to take advantage of the growing interest in portable navigation devices. Independent market research indicates we have maintained a strong leadership position in North America with approximately fifty percent PND market share, and our market position in Europe continues to improve as well.

    As we head into the holiday season, we believe we are prepared to meet the growing demand for our products. We have increased our manufacturing capacity and grown total inventories over US$200 million since the end of the second quarter of 2007. Our order book is strong, and we believe our strategy of extensive market segmentation using both our popular nuvi(TM) and c-series product offerings will drive positive results. Useful content and competitive features integrated into reliable, easy-to-use products at attractive price points are what customers want - and what they receive when they choose Garmin.

    Our aviation segment continued to grow steadily during the quarter. Positive response to our WAAS and GMX200 product offerings and growth in the sale of our G1000 cockpit continued. In the third quarter we announced additional wins for our G1000 cockpit for future Cessna Caravan, Socata TBM 850 as well as the new PiperJet and a G1000 retrofit for the King Air 200/B200. Also during the 3rd quarter, Cessna announced that our new G300 cockpit display system was selected for its new Skycatcher light sport aircraft. We continue to believe the aviation segment is positioned to meet our 2007 guidance for this segment.

    Our marine segment also showed steady growth, as customer interest in our revolutionary new marine products and cartography continued to drive revenues for the quarter. While typical marine segment revenues decline sequentially in third and fourth quarter each year, results remain seasonally strong. We continue to believe the marine segment is positioned to meet our 2007 guidance.

    Third quarter revenue for our outdoor/fitness segment was strong compared to the year ago quarter. Increased sales generated by the new Astro dog tracking product, as well as new eTrex and Rino products with high-sensitivity GPS drove this growth. We see continued growth opportunities for this segment and believe the outdoor/fitness segment is positioned to meet our 2007 guidance for the segment."

    Financial overview from Kevin Rauckman, Chief Financial Officer:

    "Our financial results for the third quarter were strong and in line with our expectations. Our retail orders are strong, and we look forward to a solid 2007 holiday season," said Kevin Rauckman, chief financial officer of Garmin Ltd. "Our revenue and earnings per share during the quarter grew 79% and 57% respectively, exceeding our expectations. Excluding the impact of foreign exchange, EPS for the quarter grew 78%, from US$0.50 to US$0.89.

    Gross margin for the overall business declined modestly in the third quarter, down 180 basis points from the year-ago quarter. The automotive/mobile segment gross margin improved 70 basis points during the quarter due to a seasonal, favorable product mix shift towards higher-margin North American product, and PND pricing declined more slowly than we expected. The aviation segment also improved 180 basis points as a function of favorable product mix. Gross margin for the marine segment declined 50 basis points during the quarter when compared to the year-ago quarter as a function of product mix, and the outdoor/fitness segments declined 320 basis points, reflecting a product mix shift and the transition of the eTrex product line.

    Operating margin remained relatively stable, declining just 30 basis points from the year-ago quarter. This stability reflected an anticipated decline in gross margin offset by operating leverage as revenues outpaced increased spending in advertising and research and development expenses during the quarter. While we are pleased with these results, we anticipate more significant margin compression during the fourth quarter of 2007.

    We also generated US$117 million of free cash flow in the third quarter of 2007, resulting in a cash and marketable securities balance of  US$1.03 billion at the end of the quarter."

    Fiscal 2007 Outlook

    We remain optimistic about the future success of our business and our ability to serve customers and distributors around the world. With this in mind, we are updating our guidance as follows:

@@start.t2@@      -- We anticipate overall revenue to exceed US$2.9 billion in 2007, and
          earnings per share to exceed US$3.40.
      -- We anticipate segment revenue growth rates for our automotive/mobile,
          aviation, marine, and outdoor/fitness segments to be 90%, 30%, 20%,
          and 10%, respectively
      -- We anticipate operating margins to be approximately 27% for the full
          year 2007
      -- Our effective tax rate should remain approximately 13%@@end@@

    Announcement of Management Appointment

    Given our anticipated ongoing business growth, Cliff Pemble will be assuming the new positions of Chief Operating Officer (COO) and President of Garmin Ltd. In addition, he will assume direct supervision of all North American Garmin subsidiaries, including Garmin AT, Dynastream, and Digital Cyclone. Dr. Kao will continue in his role as Chairman and CEO of Garmin Ltd. but will now be able to devote more time to business development, strategic planning, and the development of our Asia-Pacific business initiatives.

    Announcement of Intent to Make an Offer to Acquire all the Outstanding Shares in Tele Atlas N.V.

    Early this morning we announced our intention to make an offer to acquire all the outstanding shares in Tele Atlas N.V. Garmin has established itself as a leader in navigation technology by consistently delivering award-winning, reliable, easy to use products with rich content and competitive features at attractive prices. This acquisition is consistent with our vision as a leader in our market and our vertical integration strategy. Advanced mapping data is an essential ingredient for the continued growth of the navigation industry and this acquisition provides a means for Garmin to contribute more broadly to the development and growth of this market. We will discuss this important announcement more fully on our earnings call this morning.

    Non-GAAP Measures

CAYMAN ISLANDS, October 31 /PRNewswire/ --

    Net income (earnings) per share, excluding foreign currency

    Management believes that net income per share before the impact of foreign currency translation gain or loss is an important measure. The majority of the company's consolidated foreign currency translation gain or loss results from translation into New Taiwan dollars at the end of each reporting period of the significant cash and marketable securities, receivables and payables held in U.S. dollars by the company's Taiwan subsidiary. Such translation is required under GAAP because the functional currency of this subsidiary is New Taiwan dollars. However, there is minimal cash impact from such foreign currency translation and management expects that the Taiwan subsidiary will continue to hold the majority of its cash, cash equivalents and marketable securities in U.S. dollars. Accordingly, earnings per share before the impact of foreign currency translation gain or loss allows an assessment of the company's operating performance before the non-cash impact of the position of the U.S. dollar versus the New Taiwan dollar, which permits a consistent comparison of results between periods.

    The following table contains a reconciliation of GAAP net income per share to net income per share excluding the impact of foreign currency translation gain or loss.

@@start.t3@@                                        Garmin Ltd. And Subsidiaries
                                  Net income per share, excluding FX
                          (in thousands, except per share information)
                         (all amounts in USD unless otherwise specified)
                                            13-Weeks Ended                      39-weeks Ended
                                 September 29, September 30,  September 29, September 30,
                                         2007                2006                 2007                2006
      Net Income (GAAP)  $193,507          $122,978          $547,744         $333,778
      Foreign currency
        (gain) / loss,
        net of tax
        effects                    $3,151          ($12,569)          ($3,036)         ($8,776)
      Net income,
        excluding FX         $196,658          $110,409          $544,708         $325,002
      Net income per share (GAAP):
        Basic                         $0.89                $0.57                $2.53              $1.54
        Diluted                      $0.88                $0.56                $2.50              $1.52
      Net income per share, excluding FX:
        Basic                         $0.91                $0.51                $2.52              $1.50
        Diluted                      $0.89                $0.50                $2.48              $1.48
      Weighted average common shares outstanding:
        Basic                      216,773            216,317            216,456          216,502
        Diluted                  220,644            218,866            219,482          218,878@@end@@

    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 less capital expenditures for property and equipment.

    The following table contains a reconciliation of GAAP net cash provided by operating activities to free cash flow.

@@start.t4@@                                          Garmin Ltd. And Subsidiaries
                                                    Free Cash Flow
                                                    (in thousands)
                          (all amounts in USD unless otherwise specified)
                                          13-Weeks Ended                        39-Weeks Ended
                                September 29, September 30,  September 29, September 30,
                                        2007                2006                 2007                2006
      Net cash provided
        by operating
        activities          $133,766          $116,750          $555,905         $249,125
      Less: purchases
        of property and
        equipment            ($16,873)         ($18,865)        ($128,893)        ($45,476)
      Free Cash Flow      $116,893            $97,885          $427,012         $203,649@@end@@

    Earnings Call Information

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

@@start.t5@@      When:      Wednesday, October 31, 2007 at 11:00 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 +1-800-883-9537.
      Contact: investor.relations@garmin.com@@end@@

    A phone recording will be available for five business days following the earnings call and can be accessed by dialing +1-800-642-1687 or +1-706-645-9291 and utilizing the access code 19218207. An archive of the live webcast will be available until November 30, 2007 on the Garmin website at http://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. Any statements regarding the company's estimated earnings and revenue for fiscal 2007, the Company's expected segment revenue growth rate, margins, the number of new products to be introduced in 2007 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 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 30, 2006 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin's 2006 Form 10-K can be downloaded from http://www.garmin.com/aboutGarmin/invRelations/finReports.html.

    Through its operating subsidiaries, Garmin Ltd. designs, manufactures, and markets navigation, communications and information devices, most of which are enabled by GPS technology. Garmin is a leader in the general aviation and consumer markets and its products serve aviation, marine, outdoor, fitness, automotive, mobile and OEM applications. Garmin Ltd. is incorporated in the Cayman Islands, and its principal subsidiaries are located in the United States, Taiwan and United Kingdom. For more information, visit the investor relations site of Garmin Ltd. at www.garmin.com or contact the Investor Relations department at +1-913-397-8200. Garmin and Forerunner are registered trademarks, and Edge is a trademark of Garmin Ltd. or its subsidiaries.

@@start.t6@@                                        Garmin Ltd. And Subsidiaries
                      Condensed Consolidated Balance Sheets (Unaudited)
                              (In thousands, except share information)
                         (all amounts in USD unless otherwise specified)
                                                                            September 29,    December 30,
                                                                                          2007                2006
      Assets
      Current assets:
        Cash and cash equivalents                                  $703,749          $337,321
        Marketable securities                                            58,668              73,033
        Accounts receivable, net                                      520,538            403,524
        Inventories, net                                                  493,739            271,008
        Deferred income taxes                                            57,700              55,996
        Prepaid expenses and other current assets            23,538              28,202
      Total current assets                                          1,857,932         1,169,084
      Property and equipment, net                                  358,578            250,988
      Marketable securities                                            263,735            407,843
      Restricted cash                                                         1,580                1,525
      Licensing agreements, net                                        14,398                3,307
      Other intangible assets, net                                 149,277              64,273
      Total assets                                                      $2,645,500        $1,897,020
      Liabilities and Stockholders' Equity
      Current liabilities:
        Accounts payable                                                 $236,044            $88,375
        Salaries and benefits payable                                32,524              16,268
        Warranty reserve                                                    55,225              37,639
        Other accrued expenses                                         209,136            100,732
        Income taxes payable                                              35,033              94,668
      Total current liabilities                                      567,962            337,682
      Long-term debt, less current portion                          603                  248
      Deferred income taxes                                                1,219                1,191
      Other liabilities                                                    90,505                      -
      Stockholders' equity:
        Common stock                                                            1,086                1,082
        Additional paid-in capital                                  123,025              83,438
        Retained earnings                                              1,863,867         1,478,654
        Accumulated other comprehensive loss                    (2,767)            (5,275)
      Total stockholders' equity                                 1,985,211         1,557,899
      Total liabilities and stockholders' equity      $2,645,500        $1,897,020@@end@@

@@start.t7@@                                        Garmin Ltd. And Subsidiaries
                  Condensed Consolidated Statements of Income (Unaudited)
                          (In thousands, except per share information)
                         (all amounts in USD unless otherwise specified)
                                            13-Weeks Ended                      39-Weeks Ended
                                  September 29, September 30, September 29, September 30,
                                            2007              2006              2007                2006
      Net sales                    $728,673        $407,997    $1,963,298    $1,162,776
      Cost of goods sold        386,822         209,137      1,009,028         584,843
      Gross profit                 341,851         198,860         954,270         577,933
      Selling, general and
        administrative
        expenses                        87,060          47,489         248,358         140,167
      Research and development
        expense                         40,634          30,399         111,863          82,105
                                          127,694          77,888         360,221         222,272
      Operating income          214,157         120,972         594,049         355,661
      Other income (expense):
      Interest income              11,798            9,622          31,997          25,464
      Interest expense                (273)                (2)            (328)              (14)
      Foreign currency            (3,626)         14,874            3,493          10,386
      Other                                  570                 70                959            3,507
                                              8,469          24,564          36,121          39,343
      Income before income
        taxes                          222,626         145,536         630,170         395,004
      Income tax provision      29,119          22,558          82,426          61,226
      Net income                  $193,507        $122,978        $547,744        $333,778
      Net income per share:
        Basic                              $0.89            $0.57            $2.53            $1.54
        Diluted                          $0.88            $0.56            $2.50            $1.52
      Weighted average common
        shares outstanding:
        Basic                          216,773         216,317         216,456         216,502
        Diluted                        220,644         218,866         219,482         218,878@@end@@

@@start.t8@@                                      Garmin Ltd. And Subsidiaries
              Condensed Consolidated Statements of Cash Flows (Unaudited)
                                                  (In thousands)
                          (all amounts in USD unless otherwise specified
                                                                                      39-Weeks Ended
                                                                    September 29,          September 30,
                                                                                  2007                         2006
      Operating Activities:
      Net income                                                      $547,744                  $333,778
      Adjustments to reconcile net income
        to net cash
        provided by operating activities:
            Depreciation                                                22,786                      15,447
            Amortization                                                18,803                      19,844
            Loss (gain) on sale of property
              and equipment                                                  71                            (8)
            Provision for doubtful accounts                  3,467                          796
            Deferred income taxes                                 (1,157)                  (29,867)
            Foreign currency transaction
              gains/losses                                                3,232                    (19,724)
            Provision for obsolete and slow
              moving inventories                                    21,502                      15,260
            Stock compensation expense                          8,830                        8,378
            Realized gains on marketable
              securities                                                         -                      (3,852)
      Changes in operating assets and
        liabilities:
            Accounts receivable                                  (90,497)                  (79,648)
            Inventories                                              (234,920)                 (148,891)
            Other current assets                                    4,510                      (1,192)
            Accounts payable                                        117,034                      48,720
            Other current and non-current
              liabilities                                              147,608                      69,704
            Income taxes                                                 9,486                      22,866
            Purchase of licenses                                 (22,594)                    (2,486)
      Net cash provided by operating
        activities                                                      555,905                    249,125
      Investing activities:
      Purchases of property and equipment              (128,893)                  (45,476)
      Purchase of intangible assets                          (2,481)                    (1,513)
      Purchase of marketable securities                 (983,716)                 (348,621)
      Redemption of marketable securities            1,141,431                    197,008
      Change in restricted cash                                      (56)                        (104)
      Proceeds from asset sale                                          4                            75
      Net cash paid for acquisition of
        businesses and other intangibles                  (84,126)                            -
      Net cash used in investing activities            (57,837)                 (198,631)
      Financing activities:
      Proceeds from issuance of common
        stock                                                                15,358                      10,042
      Dividends                                                        (162,531)                            -
      Stock repurchase                                                        -                    (50,451)
      Payments on long term debt                                  (218)                            -
      Tax benefit related to stock option
        exercise                                                          15,776                        7,453
      Net cash used in financing activities          (131,615)                  (32,956)
      Effect of exchange rate changes on
        cash and cash equivalents                                    (25)                        (167)
      Net increase in cash and cash
        equivalents                                                    366,428                      17,371
      Cash and cash equivalents at
        beginning of period                                        337,321                    334,352
      Cash and cash equivalents at end of
        period                                                          $703,749                  $351,723@@end@@

@@start.t9@@                                      Garmin Ltd. And Subsidiaries
         Revenue, Gross Profit, and Operating Income by Segment (Unaudited)
                        (all amounts in USD unless otherwise specified)
                                                              Reporting Segments
                                  Outdoor/                          Auto/
                                  Fitness         Marine        Mobile        Aviation        Total
      13-Weeks Ended
        September 29, 2007
      Net sales              $87,747        $47,659      $518,939        $74,328    $728,673
      Gross profit         $46,553        $25,170      $221,148        $48,980    $341,851
      Operating income  $30,178        $15,623      $141,855        $26,501    $214,157
      13-Weeks Ended
        September 30, 2006
      Net sales              $70,651        $40,588      $237,981        $58,777    $407,997
      Gross profit         $39,803        $21,645        $99,708        $37,704    $198,860
      Operating income  $28,817        $13,659        $59,517        $18,979    $120,972
      39-Weeks Ended
        September 29, 2007
      Net sales            $225,437      $170,433  $1,343,460      $223,968 $1,963,298
      Gross profit        $123,616        $92,704      $591,400      $146,550    $954,270
      Operating income  $79,986        $60,033      $370,448        $83,582    $594,049
      39-Weeks Ended
        September 30, 2006
      Net sales            $205,412      $141,406      $644,097      $171,861 $1,162,776
      Gross profit        $118,615        $79,484      $269,855      $109,979    $577,933
      Operating income  $85,116        $53,718      $155,782        $61,045    $355,661@@end@@

    Web site: http://www.garmin.com

ots Originaltext: Garmin Ltd.
Im Internet recherchierbar: http://www.presseportal.ch

Contact:
INVESTOR CONTACT: Polly Schwerdt, +1-913-397-8200,
investor.relations@garmin.com, or MEDIA CONTACT: Ted Gartner,
+1-913-397-8200, media.relations@garmin.com, both of Garmin Ltd.;
Photo:  http://www.newscom.com/cgi-bin/prnh/20061026/CGTH082LOGO, AP
Archive:  http://photoarchive.ap.org, PRN Photo Desk,
photodesk@prnewswire.com



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