Garmin 2009 Annual Report Download - page 74

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Gainonsaleofequityofsecuritiesof$50.9millionin2008wasprimarilygeneratedfromthesaleofour
equityinterestinTeleAtlasN.V.whichweacquiredin2007inconnectionwithourannouncedintenttomakea
cashofferforalloutstandingshares,whichwassubsequentlyabandoned.
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IncomeTaxProvision
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Ourfiscal2009earningsbeforetaxesfell11.6%whencomparedto2008,whileourincometaxexpense
decreased42.3%.Incometaxesfell$76.8million,to$104.7million,forfiscalyear2009from$181.5millionfor
fiscalyear2008,duetoalowereffectivetaxrateandthereducedearningsbeforetaxes.Theeffectivetaxrate
was12.9%forfiscal2009comparedto19.9%forfiscal2008.Thedecreaseintaxrateisduetothefavorablemix
oftaxableincomeamongthetaxjurisdictionsinwhichtheCompanyoperatesandthereleaseofincometax
reservesforwhichthestatuteoflimitationshasexpired.
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NetIncome
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Asaresultofthevariousfactorsnotedabove,netincomedecreased3.9%to$704.0millionforfiscalyear
2009comparedto$732.8millionforfiscalyear2008.
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Comparisonof52‐WeeksEndedDecember27,2008andDecember29,2007
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NetSales
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NetSales %ofRevenues NetSales %ofRevenues $Change %Change
Outdoor/Fitness $427,783 12.2% $339,741 10.7% $88,042 25.9%
Marine 204,477 5.9% 203,399 6.4% 1,078 0.5%
Automotive/Mobile 2,538,411 72.6% 2,342,184 73.6% 196,227 8.4%
Aviation 323,406 9.3% 294,995 9.3% 28,411 9.6%
Total $3,494,077 100.0% $3,180,319 100.0% $313,758 9.9%
52‐weeksendedDecember27,2008 52‐weeksendedDecember29,2007 YearoverYear
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Theincreaseintotalnetsalesfor2008wasprimarilydrivenbyoutdoor/fitness,automotive/mobileand
aviationproductofferings.Automotive/mobilerevenueremainsasignificantlylargerportionofourrevenuemix,
decreasingslightlyfrom73.6%in2007to72.6%in2008.Totalunitsalesincreased38%to16.9millionin2008
from12.3millionin2007.Thehigherunitsalesvolumein2008wasprimarilyattributabletostrongsalesof
automotiveproducts,particularlyinNorthAmerica,andoutdoor/fitnessproducts.Ingeneral,management
believesthatcontinuousinnovationandtheintroductionofnewproductsareessentialforfuturerevenuegrowth.
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Automotive/mobilesegmentrevenuegrew8.4%in2008,onthestrengthofthenuvi®seriesofpersonal
navigationdevices(PNDs),aswellasincreasedconsumerawarenessofthecapabilitiesandapplicationsofGPS.
Onapercentagebasis,revenuesinouroutdoor/fitnesssegmentgrewfasterthananyothersegmentfromtheyear
agoperiodduetotheintroductionoftheColorado™series,theOregon™series,theForerunner®405andEdge®
705whichofferenhancedformfactorsandcartography.Ouraviationsegmentcontinuedtogrowonthestrength
ofourG1000cockpitasanOEM(originalequipmentmanufacturer)solution.Thisgrowthslowedsignificantlyin
thesecondhalfof2008asthemacroeconomicconditionsinfluencedpurchasingdecisionsandslowedOEM
productionschedules.Marinerevenueswereslightlyhigherthantheprioryearduetostronggrowthinthefirst
quarterof2008offsetbyflattodecliningrevenueintheremainderoftheyearduetomacroeconomicconditions
andfuelprices.
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