Garmin 2009 Annual Report Download - page 71

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Comparisonof52‐WeeksEndedDecember26,2009andDecember27,2008
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NetSales
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NetSales %ofRevenues NetSales %ofRevenues $Change %Change
Outdoor/Fitness $468,924 15.9% $427,783 12.2% $41,141 9.6%
Marine 177,644 6.0% 204,477 5.9% (26,833) ‐13.1%
Automotive/Mobile 2,054,127 69.7% 2,538,411 72.6% (484,284) ‐19.1%
Aviation 245,745 8.4% 323,406 9.3% (77,661) ‐24.0%
Total $2,946,440 100.0% $3,494,077 100.0% ($547,637) ‐15.7%
52‐weeksendedDecember26,2009 52‐weeksendedDecember27,2008 YearoverYear
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Netsalesdecreased15.7%in2009whencomparedtotheyear‐agoperiod.Thedecreaseoccurredacross
allsegments,exceptoutdoor/fitness,withthegreatestdecreasesintheautomotive/mobileandaviation
segments.Automotive/mobilerevenueremainsthelargestportionofourrevenuemix,butdeclinedfrom72.6%
in2008to69.7%in2009.
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Totalunitsalesdecreased2%to16.6millionin2009from16.9millionin2008.Thelowerunitsales
volumewasattributabletodecliningvolumesacrossallsegments,excludingoutdoor/fitness,withthegreatest
percentagedeclinesoccurringinaviationandmarine.Thelowervolumesweredrivenprimarilybythe
macroeconomicconditionsandreducedinventorylevelswithmanyofourretailpartners.
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Automotive/mobilesegmentrevenuedeclined19.1%in2009astheaveragesellingpricedeclined18%
andvolumesdeclined2%.Averagesellingpricedeclinescontinuetobeattributabletothecompetitive
environmentinwhichourautomotive/mobileproductscompete.Theaviationandmarinesegmentsdeclined
24.0%and13.1%,respectivelyin2009,asbothindustriesexperiencedsignificantslowdownsassociatedwiththe
macroeconomicconditions.Outdoor/fitnesssegmentrevenueincreased9.6%duetonewproductintroductions,
includingtheDakota™series,theForerunner®405CX,theForerunner®310XTandEdge®500,andincreasing
globalpenetrationofthefitnesscategory.Allsegmentsshowedimprovingtrendsinthesecondhalfof2009asthe
macroeconomicconditionsimproved.
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TheCompanyanticipatesrevenuegrowthbetween0‐5%in2010drivenbymobileproductinitiativesand
growthintheoutdoor/fitness,aviationandmarinesegments.Ingeneral,managementbelievesthatcontinuous
innovationandtheintroductionofnewproductsareessentialforfuturerevenuegrowth.
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GrossProfit
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GrossProfit %ofRevenues GrossProfit %ofRevenues $Change %Change
Outdoor/Fitness $306,842 65.4% $246,746 57.7% $60,096 24.4%
Marine 105,215 59.2% 111,425 54.5% (6,210) ‐5.6%
Automotive/Mobile 861,900 42.0% 977,595 38.5% (115,695) ‐11.8%
Aviation 170,154 69.2% 217,749 67.3% (47,595) ‐21.9%
Total $1,444,111 49.0% $1,553,515 44.5% ($109,404) ‐7.0%
52‐weeksendedDecember26,2009 52‐weeksendedDecember27,2008 YearoverYear
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Thedecreaseingrossprofitdollarswasprimarilyattributabletotheautomotive/mobileandaviation
segmentswheretheeffectsofrevenuedeclineswerepartiallyoffsetbytheimprovedgrossmarginsearned.Gross
profitmarginpercentagefortheCompanyoverallincreased450basispointsasmarginsexpandedinallsegments.
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Theautomotive/mobilesegmentgrossprofitmarginpercentageincreaseof350basispointswasdriven
bymaterialcostsreductionspartiallyoffsetbyinventoryreservesassociatedwiththemobilehandsetinitiativeand
pricedeclines.Managementbelievesthatgrossmarginsforthissegmentwilldeclinein2010duetoongoingprice