Garmin 2007 Annual Report Download - page 52

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Failure to obtain required certifications of our products on a timely basis could harm our business.
We have certain products, especially in our aviation segment, that are subject to governmental and similar
certifications before they can be sold. For example, FAA certification is required for all of our aviation products
that are intended for installation in type certificated aircraft. To the extent required, certification is an expensive and
time-consuming process that requires significant focus and resources. An inability to obtain, or excessive delay in
obtaining, such certifications could have an adverse effect on our ability to introduce new products and, for certain
aviation OEM products, our customers’ ability to sell airplanes. Therefore, such inabilities or delays could
adversely affect our operating results. In addition, we cannot assure you that our certified products will not be
decertified. Any such decertification could have an adverse effect on our operating results.
Our business is subject to economic, political and other risks associated with international sales and
operations.
Our business is subject to risks associated with doing business internationally. We estimate that
approximately 39% of our net sales in the fiscal year ended December 29, 2007 represented products shipped to
international destinations. Accordingly, our business, financial condition and results of operations could be harmed
by a variety of international factors, including:
y changes in foreign currency exchange rates;
y changes in a specific country’s or region’s political or economic conditions, particularly in emerging
markets;
y trade protection measures and import or export licensing requirements;
y potentially negative consequences from changes in tax laws;
y difficulty in managing widespread sales and manufacturing operations;
y acts of war, terrorism, or political unrest; and
y less effective protection of intellectual property.
We may experience unique economic and political risks associated with companies that operate in Taiwan.
Relations between Taiwan and the People’s Republic of China, also referred to as the PRC, and other
factors affecting the political or economic conditions of Taiwan in the future could materially adversely affect our
business, financial condition and results of operations and the market price and the liquidity of our shares. Our
principal manufacturing facilities where we manufacture all of our products, except our panel-mounted aviation
products, are located in Taiwan.
Taiwan has a unique international political status. The PRC asserts sovereignty over all of China, including
Taiwan, certain other islands and all of mainland China. The PRC government does not recognize the legitimacy of
the Taiwan government. Although significant economic and cultural relations have been established during recent
years between Taiwan and the PRC, the PRC government has indicated that it may use military force to gain control
over Taiwan in certain circumstances, such as the declaration of independence by Taiwan. Relations between
Taiwan and the PRC have on occasion adversely affected the market value of Taiwanese companies and could
negatively affect our operations in Taiwan in the future.
There is uncertainty as to our shareholders’ ability to enforce certain foreign civil liabilities in the Cayman
Islands and Taiwan.