Garmin 2009 Annual Report Download - page 42

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Employees
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AsofDecember31,2009,Garminhad8,437fullandpart‐timeemployeesworldwide,ofwhom2,948wereinthe
UnitedStates,68wereinCanada,4,727wereinTaiwan,623wereinEurope,and71wereinotherglobal
locations.ExceptforsomeofGarmin’semployeesinBrazil,IcelandandSweden,noneofGarmin’semployeesare
representedbyalaborunionandnoneofGarmin'sNorthAmericanorTaiwanemployeesarecoveredbya
collectivebargainingagreement.Garminconsidersitsemployeerelationstobegood.
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Item1A.RiskFactors
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Therisksdescribedbelowarenottheonlyonesfacingourcompany.Additionalrisksanduncertaintiesnot
presentlyknowntousorthatwecurrentlybelievetobeimmaterialmayalsoimpairourbusinessoperations.Ifany
ofthefollowingrisksoccur,ourbusiness,financialconditionoroperatingresultscouldbemateriallyadversely
affected.
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RisksRelatedtotheCompany
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Thedemandforpersonalnavigationdevices(PNDs)maybeerodedbyreplacementtechnologiesbecoming
availableonmobilehandsetsandfactory‐installedsystemsinnewautos.
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Wehaveexperiencedsubstantialgrowthintheautomotive/mobilesegmentwhichhasresultedin
GPS/navigationtechnologiesbeingincorporatedintocompetingdevicessuchasmobilehandsetsandnew
automobilesthroughfactory‐installedsystems.MobilehandsetsarefrequentlyGPS‐enabledandmanycompanies
arenowofferingnavigationsoftwareformobiledevices.Theacceptanceofthistechnologybyconsumerscould
slowourgrowthandfurtherreducemargins.Navigationsystemsarealsobecomingmoreprevalentasoptional
equipmentonnewautomobiles.Increasednavigationpenetrationonnewautomobilescouldslowourgrowthand
furtherreducemargins.
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Ourfinancialresultsarehighlydependentontheautomotive/mobilesegment,whichnowrepresents
approximately70%ofourrevenuesandmaybematuringleadingtolessergrowththanwehaveexperiencedin
thepast.
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Wehaveexperiencedsubstantialgrowthintheautomotive/mobilesegmentofourbusinessinrecent
yearsastheproductshavebecomemass‐marketconsumerelectronicsinbothEuropeandNorthAmerica.This
marketgrowthmaynowbeslowingaspenetrationratesincreaseandcompetingtechnologiesemerge.Slowing
growth,alongwiththesignificantpricereductionsthathaveoccurredduringthepastthreeyears,couldresultin
lowerrevenues.Asmarginshavealsodeclinedinthissegment,slowinggrowthmayalsoresultinlowerearnings
pershare.
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Economicconditionsanduncertaintycouldadverselyaffectourrevenueandmargins
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Ourrevenueandmarginsdependsignificantlyongeneraleconomicconditionsandthedemandfor
productsinthemarketsinwhichwecompete.Thecurrenteconomicweaknessandconstrainedconsumerand
businessspendinghasresultedindecreasedrevenueandmayinthefutureresultindecreasedrevenueand
problemswithourabilitytomanageinventorylevelsandcollectcustomerreceivables.Inaddition,financial
difficultiesexperiencedbyourretailerandOEMcustomershaveresulted,andcouldresultinthefuture,in
significantbaddebtwrite‐offsandadditionstoreservesinourreceivablesandcouldhaveanadverseaffectonour
resultsofoperations.
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