Garmin 2002 Annual Report Download - page 32

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Comparison of Fiscal Years Ended December 29, 2001 and December 30, 2000
Net Sales
Net sales increased $23.4 million, or 6.8%, to $369.1 million for fiscal year ended December 29, 2001, from $345.7 million
for fiscal year ended December 30, 2000. The increase during fiscal 2001 was primarily due to the introduction of 25 new
products and overall demand for our consumer products. Sales from our consumer products accounted for 71.3% of net
revenues for fiscal 2001 compared to 66.6% during fiscal 2000. Sales from our aviation products accounted for 28.7% of
net revenues for fiscal 2001 compared to 33.4% during fiscal 2000. Total consumer and aviation units increased 8.8% to
1,331,000 in 2001 from 1,223,000 in 2000
Net sales for the consumer segment increased $33.2 million, or 14.4%, to $263.4 million for fiscal 2001 from $230.2 million
for fiscal 2000. The increase was primarily due to the introduction of 22 new consumer products and overall demand for
our consumer products as total units were up 9.7%.
Net sales for the aviation segment decreased $9.8 million, or 8.5%, to $105.8 million for fiscal 2001 from $115.6 million for fiscal
2000. The decrease for fiscal 2001 was primarily due to declining economic conditions and the shut down of U.S. airspace as a
result of the terrorist attacks that occurred on September 11, 2001. In addition to the shut down of U.S. airspace, the general
aviation industry was further impacted by the additional restrictions implemented by the Federal Aviation Administration (FAA)
on those flights that fly utilizing Visual Flight Rules (VFR). The FAA restricted VFR flight inside 30 enhanced Class B (a 20-25 mile
radius around the 30 largest metropolitan areas in the country) airspace areas. The Aircraft Owners and Pilots Association (AOPA)
estimated that these restrictions affected approximately 41,800 general aviation aircraft based at 282 airports inside the 30
enhanced Class B airspace areas. The AOPA estimates that approximately 90% of all general aviation flights are conducted VFR,
and that only 15% of general aviation pilots are current to fly utilizing Instrument Flight Rules (IFR). These restrictions impacted
our revenues since many general aviation aircraft were grounded and were unable to fly to aviation dealers to buy our products.
As a result of the factors indicated above, total aviation units sold during fiscal 2001 declined 9.3% when compared to fiscal
2000.
Gross Profit
Gross profit increased $14.5 million, or 7.9%, to $198.2 million for fiscal year 2001 from $183.7 million in fiscal year 2000. The
increase is primarily attributed to the introduction of 25 new products and overall demand for our consumer products. Gross
profit as a percentage of net revenues improved to 53.7% in 2001 from 53.1% in 2000. The improvement in gross margin was
primarily due to the introduction of new higher margin products, improved manufacturing efficiencies on many of the new
products introduced throughout the year, and a reduction of material costs.
Gross profit for the consumer segment increased $17.0 million, or 14.7%, to $132.5 million for fiscal 2001 from $115.5 million in
fiscal 2000. The increase is primarily attributed to the introduction of 22 new consumer products and overall demand for our
consumer products. Gross profit as a percentage of net revenues for the consumer segment remained relatively flat at 50.3% for
2001 when compared to 50.2% for 2000.
Gross profit for the aviation segment decreased $2.6 million, or 3.8%, to $65.6 million for fiscal 2001 from $68.2 million for fiscal
2000. The decline in gross profit was primarily due to the decrease in revenues associated with declining economic conditions and
the shut down of U.S. airspace as a result of the terrorist attacks that occurred on September 11, 2001. Gross profit as a
percentage of net revenues for the aviation segment improved to 62.1% in 2001 from 59.0% in 2000. This improvement as a
percentage of net revenues was primarily attributed to product mix as we experienced a 13.9% increase in higher margin panel
mount unit sales during 2001 when compared to 2000.
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