Garmin 2009 Annual Report Download - page 75

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GrossProfit
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GrossProfit %ofRevenues GrossProfit %ofRevenues $Change %Change
Outdoor/Fitness $246,746 57.7% $184,655 54.4% $62,091 33.6%
Marine 111,425 54.5% 110,169 54.2% 1,256 1.1%
Automotive/Mobile 977,595 38.5% 973,205 41.6% 4,390 0.5%
Aviation 217,749 67.3% 195,226 66.2% 22,523 11.5%
Total $1,553,515 44.5% $1,463,255 46.0% $90,260 6.2%
52‐weeksendedDecember27,2008 52‐weeksendedDecember29,2007 YearoverYear
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Theincreaseingrossprofitdollarswasprimarilyattributabletotheoutdoor/fitnessandaviation
segmentswhererevenuegrowthandconsistentmarginscontributed.Grossprofitmarginpercentageforthe
Companyoveralldecreased150basispointsasaresultoftheautomotive/mobilesegmentdeclineof310basis
pointsoffsettosomeextentbystronggrossmarginsinourotherthreesegments.Theautomotive/mobile
segmentisbynaturealower‐marginbusinessandtheCompanyhasbeguntoseetheimpactsexpectedongross
marginduetofallingpricesandaproductmixshifttowardlowerendPNDs.Outdoor/fitnessgrossmarginhas
increasedduetoanewersuiteofproducts.AproductmixfavoringthehighmarginG1000intheaviationsegment
resultedinfavorablegrossmarginsfortheaviationsegmentin2008.Marinegrossmarginremainedrelatively
stableandwithinhistoricranges.
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AdvertisingExpenses
Advertising Advertising
Expense %ofRevenues Expense %ofRevenues $Change %Change
Outdoor/Fitness $27,932 6.5% $17,170 5.1% $10,762 62.7%
Marine 14,532 7.1% 11,387 5.6% 3,145 27.6%
Automotive/Mobile 160,926 6.3% 172,910 7.4% (11,984) ‐6.9%
Aviation 4,787 1.5% 5,481 1.9% (694) ‐12.7%
Total $208,177 6.0% $206,948 6.5% $1,229 0.6%
52‐weeksendedDecember27,2008 52‐weeksendedDecember29,2007
YearoverYear
 
Advertisingexpensesincreasedby$1.2milliononayear‐over‐yearbasisaswereducedactivitiesduring
thesecondhalfoftheyearduetomoderatinggrowthassociatedwiththemacroeconomicpressures.
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Selling,GeneralandAdministrativeExpenses
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Selling,General& Selling,General&
Admin.Expenses %ofRevenues Admin.Expenses %ofRevenues $Change %Change
Outdoor/Fitness $32,800 7.7% $23,949 7.0% $8,851 37.0%
Marine 17,536 8.6% 14,527 7.1% 3,009 20.7%
Automotive/Mobile 206,954 8.2% 132,155 5.6% 74,799 56.6%
Aviation 19,922 6.2% 18,919 6.4% 1,003 5.3%
Total $277,212 7.9% $189,550 6.0% $87,662 46.2%
52‐weeksendedDecember27,2008 52‐weeksendedDecember29,2007
YearoverYear
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
Theincreaseinselling,generalandadministrativeexpensewasdrivenprimarilybycostsassociatedwith
theEuropeandistributorsacquiredin2007and2008,increasedstaffingtosupportourgrowthandbaddebt
expense.Selling,generalandadministrativeexpensesexcludingadvertisingincreasedby$87.7millionin2008
duetotheacquiredEuropeandistributors,informationtechnology,callcenteroperations,andother
administrativeareastosupportthegrowthofourbusinesses,aswellasbaddebtexpenseduetothebankruptcy
ofCircuitCity.
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