Garmin 2007 Annual Report Download - page 70

Download and view the complete annual report

Please find page 70 of the 2007 Garmin annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 138

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138

44
Comparison of Fiscal Years Ended December 29, 2007 and December 30, 2006
Net Sales
Net Sales % of Revenues Net Sales % of Revenues $ Change % Change
Outdoor/Fitness $339,741 10.7% $285,362 16.1% $54,379 19.1%
Marine 203,399 6.4% 166,639 9.4% 36,760 22.1%
Automotive/Mobile 2,342,184 73.6% 1,089,093 61.4% 1,253,091 115.1%
Aviation 294,995 9.3% 232,906 13.1% 62,089 26.7%
Total $3,180,319 100.0% $1,774,000 100.0% $1,406,319 79.3%
Fiscal year ended December 30, 2006 Year over YearFiscal year ended December 29, 2007
The increase in total net sales during fiscal 2007 was primarily due to the introduction of over 60 new
products and overall demand for our automotive products. The aviation, marine, and outdoor/fitness segments also
experienced solid growth in 2007. Total units sold increased 128% to 12,300,000 in 2007 from 5,400,000 in 2006.
In general, management believes that continuous innovation and the introduction of new products are essential for
future revenue growth.
The increase in net sales to consumers was primarily due to the introduction of many new
automotive, outdoor/fitness, and marine products, strong demand for our automotive products, and solid demand for
our aviation, marine, and outdoor/fitness products. It is management’s belief that the continued demand for the
Company’s automotive products is due to overall increased consumer awareness of the capabilities and applications
of GPS, particularly as those capabilities pertain to automobile navigation. Additionally, the expansion of the GPS
market in general, as well as enhanced feature sets in our products specifically, have added to our growth.
Innovative new product offerings, enhanced cartography, rich feature sets, and products featuring high sensitivity
GPS capabilities increased sales of our marine and outdoor fitness segments. The increase in aviation sales for fiscal
2007 was primarily due to increased sales from panel mount products sold into the OEM (original equipment
manufacturers) and retrofit markets. Sales of the G1000 integrated glass cockpit were the primary reason for
increased OEM sales in 2006. While Temporary Flight Restrictions (TFR's) continue to impact general aviation, the
flying community is adapting to these changes and returning to the skies in greater numbers. Should the FAA
impose more restrictions, or elect to shutdown U.S. airspace in the future, these factors could have a material
adverse effect on our business.
Gross Profit
Gross Profit % of Revenues Gross Profit % of Revenues $ Change % Change
Outdoor/Fitness $184,655 54.4% $163,638 57.3% $21,017 12.8%
Marine 110,169 54.2% 92,952 55.8% 17,217 18.5%
Automotive/Mobile 973,205 41.6% 475,191 43.6% 498,014 104.8%
Aviation 195,226 66.2% 150,605 64.7% 44,621 29.6%
Total $1,463,255 46.0% $882,386 49.7% $580,869 65.8%
Fiscal year ended December 29, 2007 Fiscal year ended December 30, 2006 Year over Year
The increase in gross profit dollars was primarily attributable to the introduction of over 60 new products
and strong demand for our automotive and outdoor/fitness products. The reduction in gross margin percentage was
primarily due to the strong growth experienced in our lower-margin automotive/mobile product line, offset to some
extent by strong gross margins in our other three segments. Notably gross margin in our automotive/mobile
segment did not fall as much as anticipated due to volume discounts on certain components, less price competition
than anticipated, and new “premium” feature-rich products with higher selling prices and margins. Management
believes that the trend to lower gross margin percentages will continue in the future as net sales of automotive
products increase at a faster rate than the other business segments. The rise in aviation gross margin was primarily
due to a shift in product mix within our OEM and retrofit products. The decline in gross margin in the
outdoor/fitness and marine segments was primarily due to a shift in product mix.