Garmin 2002 Annual Report Download - page 25

Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations focuses on and is intended to clarify
the results of our operations, certain changes in our financial position, liquidity, capital structure and business developments
for the periods covered by the consolidated financial statements included in this annual report. This discussion should be read
in conjunction with, and is qualified by reference to, the other related information including, but not limited to, the audited
consolidated financial statements (including the notes thereto and the independent auditor's report thereon), contained in this
annual report.
The discussion set forth below, as well as other portions of this annual report, contains statements concerning potential future
events. Readers can identify these forward-looking statements by their use of such verbs as expects, anticipates, believes or
similar verbs or conjugations of such verbs. If any of our assumptions on which the statements are based prove incorrect or
should unanticipated circumstances arise, our actual results could materially differ from those anticipated by such forward-
looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited
to, the risk factors contained in our Annual Report on Form 10-K for the year ended December 28, 2002, filed with the Securities
and Exchange Commission (Commission file number 0-31983). Readers are strongly encouraged to consider those factors when
evaluating any such forward-looking statement. We will not update any forward-looking statements in this annual report.
Beginning in 1998, the Company elected to change its fiscal year to a 52-53 week period ending on the last Saturday of the
calendar year. Fiscal year 2000 contained 53 weeks compared to 52 weeks for fiscal years 2002, 2001, 1999 and 1998. Unless
otherwise stated, all years and dates refer to the Company’s fiscal year and fiscal periods. Unless the context otherwise requires,
references in this document to “the Company,” “we,” “us,” “our” and similar terms refer to Garmin Ltd. and its subsidiaries.
Overview
We are a leading worldwide provider of navigation, communications and information devices, most of which are enabled by
Global Positioning System, or GPS, technology. We operate in two business segments, the consumer and aviation markets. Both
of our segments offer products through our network of independent dealers and distributors. However, the nature of products
and types of customers for the two segments vary significantly. As such, the segments are managed separately. Our consumer
segment includes portable GPS receivers and accessories for marine, recreation, land and automotive applications sold primarily
to retail outlets. Our aviation products are portable and panel-mount avionics for Visual Flight Rules and Instrument Flight Rules
navigation and are sold primarily to retail outlets and certain aircraft manufacturers.
Since our first products were delivered in 1991, we have generated positive income from operations each year and have funded
our growth from these profits. Our sales have increased at a compounded annual growth rate of 23% since 1996 and our net
income has increased at a compounded annual growth rate of 36% since 1996. All of this growth has been organic; none has
occurred as a result of any acquisition or merger.
Since our principal locations are in the United States, Taiwan and the U.K., we experience some foreign currency fluctuations
in our operating results. The functional currency of our European operations is the U.S. dollar (effective in 2001) and the
functional currency of our Asian operations is the New Taiwan Dollar. Minimal transactions of our European operations are
now denominated in British Pound Sterling. We experienced $0.0 million, $11.6 million, $7.0 million, and $(1.5) million in
foreign currency gains (losses) during fiscal years 2002, 2001, 2000, and 1999, respectively. To date, we have not entered into
hedging transactions with either the British Pound Sterling or the New Taiwan Dollar, although we may utilize hedging
transactions in the future.
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