Garmin 2008 Annual Report Download

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2
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8
ANNUAL
REPORT

Table of contents

  • Page 1
    2 0 0 8 ANNUAL R E P O RT

  • Page 2
    ... N T E N T S 2008 highlights ...1 Letter to shareholders...2 About Garmin...4 Aviation ...6 Automotive and mobile ...8 Marine ...12 Outdoor and fitness ...14 Resources around the world ...16 Down the road ...17 Testimonials ...18 2008 financial summary ...20 Company information ...inside back cover

  • Page 3
    ... • Worldwide leader in PND market share • Total revenue $3.49 billion, up 10% • Full year revenue growth in all four segments • Sold 16.9 million units, up 38% • Repurchased 17.1 million common shares • 48% return on invested capital • Debt-free with $973 million cash and marketable...

  • Page 4
    ... to be a full-line supplier of navigation and communication equipment to multiple markets including aviation, automotive and mobile, fitness and outdoor recreation, and marine. Within these markets, we strive to create products that cover a range of price points and feature sets, from good to better...

  • Page 5
    3

  • Page 6
    ... designs, manufactures and markets navigation, communication and information devices, many of which are enabled by GPS (global positioning system) technology. GPS uses satellites to locate a user's position, display it on an electronic map and provide guidance to other locations on Earth. We manage...

  • Page 7
    34% Worldwide leader in PND market share. Garmin 15% Others 3% 12% 29% 28% 15% Others Garmin 3% 18% 28% 2007 Worldwide market share Source: Canalys 2008 Worldwide market share Source: Canalys 5

  • Page 8
    ... dual-screen G600 made Garmin's revolutionary all-glass cockpit technology available to the retrofit market. This affordable glass system includes a primary flight display and multifunction display mounted side by side. The flat-panel screens fit neatly into the instrument panel, replacing multiple...

  • Page 9
    ... integrated system tailored for the Cirrus SR22-G3. The 12-inch primary flight display and multifunction display simplify operation by digitally depicting all information from aircraft attitude and air data to engine instrumentation, real-time weather data link, traffic and terrain. The Perspective...

  • Page 10
    ... steering wheel, a user controls the nüvi by speaking commands instead of touching the display. Drivers can keep their eyes on the road the entire time and perform most functions without taking their hands from the wheel. PND software advances in 2008 included lane assist with junction view in the...

  • Page 11
    ... role than ever before as Garmin designed holiday and year-round displays for retailers including Best Buy, Costco, Wal-Mart and many others. Partnerships with several OEMs (original equipment manufacturers) placed Garmin navigation systems in even more vehicles. In 2008, a number of OEMs, including...

  • Page 12
    ... at turn-by-turn GPS navigation with Asus's experience in designing and manufacturing mobile phones to create the full line of nüvifone location-based smartphones. The alliance is expected to help Garmin provide a wide range of phone form factors and price points to the growing mobile market. The...

  • Page 13
    11

  • Page 14
    ... 5.2-inch touchscreen displays. The GPSMAP 640 comes preloaded with both street maps and marine charts. The GPSMAP 620 is designed for markets outside the United States and accepts street or marine cartography via an SDâ„¢ card slot. These new products work in conjunction with the Garmin marine...

  • Page 15
    2008 $ 204 A complete network of marine products for boats of all sizes. 2007 $ 203 2006 $ 167 2005 $ 158 Marine revenue ($ in millions) 13

  • Page 16
    ... also accept either City Navigator® maps (for street rides) or topographic maps (for off-road adventures) via an SD™ card slot. The Edge 705 adds a barometric altimeter, for tracking elevation changes during a ride, and ANT+™ wireless compatibility. Garmin's second big cycling announcement came...

  • Page 17
    ...products featured ANT+ wireless technology. This ultra low power wireless network can connect a Garmin GPS device to ANT+ enabled heart rate monitors, power meters, speed/cadence sensors, foot pods and more. It also allows certain units to wirelessly share data with one another. Garmin looks for ANT...

  • Page 18
    ... of Garmin devices. A knowledgeable staff is Garmin-trained to serve local and international guests shopping the "Magnificent Mile." In the United Kingdom, our office in Southampton handles marketing, sales and support for Europe, Africa and the Middle East. A new pick module and eConveyor system in...

  • Page 19
    ... These phones will give customers locationbased services, not just when navigating and searching for points of interest, but also in every application from e-mail to photos to instant messaging. We are aligning with GSM (Global System for Mobile communications) wireless carriers to distribute Garmin...

  • Page 20
    ... other brands, I won't put anything else in my plane or car. Your new synthetic vision technology is the stuff of sci-fi movies. I cannot wait to try it out! Keep up the excellent work and thanks for your excellent products! "Best customer support ever, in any industry" I bought my first Garmin GPS...

  • Page 21
    ... Edge and follow them will change the way people share bike rides. I'm just beginning to explore the possibilities. I wish the best to Garmin and its racing team in the Tour de France and throughout the rest of the season. It's a perfect match of leading technology products and an exciting arena in...

  • Page 22
    ... 2004 $763 $1,028 $1,774 $3,494 2008 FINANCIAL SUMMARY $3,180 2008 $3.48 2007 $3.89 2006 $2.35 Revenue and net income (in millions) $206 revenue net income 2005 $1.43 2004 $0.94 Revenue and net income ($ in millions) Diluted EPS ($Diluted per share) EPS (in millions) 2008 $206 2008...

  • Page 23
    ... Code) Camana Bay, Cayman Islands (Address of principal executive offices) Registrant's telephone number, including area code: (345) 640-9050 Securities registered pursuant to Section 12(b) of the Act: Common Shares, $0.005 Per Share Par Value (Title of each class) NASDAQ Global Select Market (Name...

  • Page 24
    ... as of June 28, 2008 (based on the closing price of the registrant's common shares on the Nasdaq Stock Market for that date) was $6,026,179,129. Number of shares outstanding of the registrant's common shares as of February 20, 2009: Common Shares, $.005 par value - 200,392,897 Documents incorporated...

  • Page 25
    ... Statements and Supplementary Data ...53 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ...79 Controls and Procedures ...80 Other Information ...82 Part III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance ...83...

  • Page 26
    ... System ("GPS") technology. Garmin designs, develops, manufactures and markets a diverse family of hand-held, portable and fixed-mount GPS-enabled products and other navigation, communications and information products for the automotive/mobile, outdoor/fitness, marine, and general aviation markets...

  • Page 27
    ...-priced PND that speaks street names and has a 4.3" wide screen, the nüvi 2x5 series with Bluetooth® wireless technology for hands-free calling and a bundled subscription to traffic alerts and the nüvi 7x5 series with Lane Assist which depicts road signs and provides guidance to the correct lane...

  • Page 28
    ... suite designed for the retrofit and forward fit avionics market. Also in 2008, Garmin introduced several new portable aviation navigators, including the GPSMAP 696, a tablet-styled GPS navigator with a 7-inch screen, detailed electronic charts, real-time weather and high resolution terrain display...

  • Page 29
    ... features 3-D building view and lane assist and a digital fuel gauge. Garmin Mobile is a subscription-based software application that lets compatible cell phones function as versatile GPS navigators. Garmin Mobile XT is a data card that turns many smartphones into full-featured navigators. Users can...

  • Page 30
    ... Oregon 300 features a worldwide basemap with shaded relief. The Oregon 400t, 400c, 400i and 300 are equipped with a barometric altimeter and electronic compass and are compatible with Garmin's heart-rate monitors and speed/cadence sensors. eTrex® (8 models) Compact handheld GPS units for outdoor...

  • Page 31
    ...assist the hunter. It is loaded with many of the features of our outdoor devices including: barometric altimeter, electronic compass, microSD slot, area calculator and a waterproof exterior. Astro® Marine Garmin's marine lineup includes network products and multifunction displays, fixed-mount GPS...

  • Page 32
    ... display units and chartplotters and enhance their utility by providing the depth sounder and fish finder functions in a remote mounted package. The GMS 10 Network Port Expander is the "nerve center" of the Garmin Marine Network. This 100-Mbit switch is designed to support the connection of multiple...

  • Page 33
    ...-in obstacle database, and a transparent navigation arc view for course, speed and distance information. A portable navigation device that offers users GPS navigation, XM WX Satellite Weatherâ„¢ capability, featuring Next Generation Radar (NEXRAD), a terrain awareness and warning system (TAWS), and...

  • Page 34
    ... displays - a PFD and MFD - in a customized package specifically designed for easy retrofit installation. The G600 is designed to communicate and integrate with Garmin's WAAS enabled panel mount products, and provides essential information such as attitude, air data, weather, terrain and traffic...

  • Page 35
    ... products are sold through a worldwide network of approximately 3,000 independent dealers and distributors in approximately 100 countries who meet our sales and customer service qualifications. Best Buy was the only customer whose purchases represented 10% or more of Garmin's consolidated revenues...

  • Page 36
    ...Taiwan-based marketing team handles the Company's Asia sales and marketing effort. Garmin's panel-mount aviation products are sold through aviation distributors around the world. Garmin's largest aviation distributors include Sportsman's Market, Aircraft Spruce and Specialty Co., Gulf Coast Avionics...

  • Page 37
    ... Aspen Avionics, and Free Flight Systems for panel-mount GPS and display units. For Garmin's Family Radio Service and General Mobile Radio Service product line, Garmin believes that its principal competitors are Motorola, Inc. ("Motorola"), Cobra Electronics Corporation and Midland Radio Corporation...

  • Page 38
    ... in GPS devices that are functional, waterproof, and rugged. Logistical agility. Operating its own manufacturing facilities helps Garmin minimize problems, such as component shortages and long component lead times which are common in the electronics industry. Many products can be re-engineered to...

  • Page 39
    ... by exporters, while all foreign currency needed for the import of merchandise and services may be purchased freely from the designated foreign exchange banks. Aside from trade-related foreign exchange transactions, Taiwan companies and residents may, without foreign exchange approval, remit outside...

  • Page 40
    ... applicable environmental laws and regulations at Garmin's Kansas headquarters facility, Garmin's European headquarters facility, and Garmin's Taiwan manufacturing facility. Employees As of December 31, 2008, Garmin had 8,919 full and part-time employees worldwide, of whom 2,896 were in the United...

  • Page 41
    ... 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 becoming more prevalent as optional equipment...

  • Page 42
    ... indicated that the U.S. is committed to supporting and improving the Global Positioning System and will continue providing it free from direct user fees. Some of our products also use signals from systems that augment GPS, such as the Wide Area Augmentation System (WAAS). WAAS is operated by the...

  • Page 43
    ... or timely manufacture of new products, demand for our products could decrease. We expect that a significant portion of our future revenue will continue to be derived from sales of newly introduced products. The market for our products is characterized by rapidly changing technology, evolving...

  • Page 44
    ... components rise, our ability to maintain timely and costeffective production of our products would be seriously harmed. We depend on third party licensors for the digital map data contained in our automotive/mobile products, and our business and/or gross margins could be harmed if we become unable...

  • Page 45
    ... our management systems and resources. Our business may suffer if we are not able to hire and retain sufficient qualified personnel or if we lose our key personnel. Our future success depends partly on the continued contribution of our key executive, engineering, sales, marketing, manufacturing and...

  • Page 46
    ... new or emerging technologies or changes in customer requirements. They may also be able to devote greater resources to the development, promotion and sale of their products. Increased competition could result in price reductions, fewer customer orders, reduced margins and loss of market share. Our...

  • Page 47
    ... or economic conditions, particularly in emerging markets; y trade protection measures and import or export licensing requirements; y potentially negative consequences from changes in tax laws; y difficulty in managing widespread sales and manufacturing operations; y acts of war, terrorism, or...

  • Page 48
    ... facilities where we manufacture all of our products, except our panel-mounted aviation products, are located in Taiwan. Taiwan has a unique international political status. The PRC asserts sovereignty over all of China, including Taiwan, certain other islands and all of mainland China. The...

  • Page 49
    ... other business issues and opportunities. Integration of acquired companies may result in problems related to integration of technology and inexperienced management teams. In addition, the key personnel of the acquired company may decide not to work for us. Our management has had limited experience...

  • Page 50
    ... acts of terrorism against the United States, Taiwan or significant markets where we sell our products. In addition, in recent years the stock market in general and the markets for shares of technology companies in particular, have experienced extreme price fluctuations which have often been...

  • Page 51
    ... Company and its subsidiaries: Garmin International, Inc. and Garmin USA, Inc. occupy a facility of approximately 995,000 square feet on 42 acres in Olathe, Kansas, where the majority of product design and development work is conducted, the majority of aviation panel-mount products are manufactured...

  • Page 52
    ...-Yang County, Taiwan. In these three facilities Garmin Corporation manufactures all of Garmin's consumer and portable aviation products and warehouses, markets and supports products for the Pacific Rim countries. Garmin AT, Inc. leases approximately 15 acres of land in Salem, Oregon under a ground...

  • Page 53
    ... LLC v. Dash Navigation, Inc., Garmin International, Inc., Lowrance Electronics, Inc., Magellan Navigation, Inc., Mio Technology USA, Navigon Inc., Netropa Corporation, and Sony Electronics, Inc. On September 4, 2008, Scott C. Harris and Memory Control Enterprise, LLC filed suit in the United States...

  • Page 54
    ...1994 to 1999, and Director of Consumer Electronic Sales of Garmin International, Inc. from 1999 to 2006. He has been a director of Garmin (Europe) Ltd. since July 2004. Mr. Bartel holds a B.S. in Electrical Engineering from South Dakota State University and a B.A. in Management from Central Michigan...

  • Page 55
    ... Company's cash balance, cash requirements and cash flow generation.. The Board of Directors approved a share repurchase program on February 4, 2008, authorizing the Company to repurchase up to 5.0 million shares of the Company as market and business conditions warrant. This share repurchase program...

  • Page 56
    ...NASDAQ 100 Index. Garmin is one of the constituent companies of the NASDAQ 100 Index. The comparison assumes a $100 investment on December 31, 2003, in Garmin common shares and in each of....08 80.47 86.63 The stock price performance included in this graph is not necessarily indicative of future stock...

  • Page 57
    Item 6. Selected Financial Data The following table sets forth selected consolidated financial data of the Company. The selected consolidated balance sheet data as of December 27, 2008 and December 29, 2007 and the selected consolidated statement of income data for the years ended December 27, 2008,...

  • Page 58
    ... Income Data: Net sales Cost of goods sold Gross profit Operating expenses: Selling, general and administrative Research and development Total operating expenses Operating income Other income/(expense), net (2), (3), (4) Income before income taxes Income tax provision Net income Net income per share...

  • Page 59
    ... share data. Overview We are a leading worldwide provider of navigation, communications and information devices, most of which are enabled by Global Positioning System, or GPS, technology. We operate in four business segments, which serve the marine, outdoor/fitness, automotive/mobile, and aviation...

  • Page 60
    ... Garmin records estimated reductions to revenue for customer sales programs returns and incentive offerings including rebates, price protection (product discounts offered to retailers to assist in clearing older products from their inventories in advance of new product releases), promotions...

  • Page 61
    ... awards stock options, stock appreciation rights ("SARs"), restricted stock units ("RSUs") and/or performance shares each year as part of Garmin's compensation package for employees. Employees with certain levels of responsibility within Garmin are eligible for stock options, SAR grants, RSU grants...

  • Page 62
    ... in Taiwan than in Olathe and Salem. Sales price variability has had and can be expected to have an effect on our gross profit. In the past, prices of our devices sold into the automotive/mobile market have declined due to market pressures and introduction of new products sold at lower price points...

  • Page 63
    ... of salaries for sales and marketing personnel; salaries and related costs for executives and administrative personnel; advertising, marketing, and other brand building costs; accounting and legal costs; information systems and infrastructure costs; travel and related costs; and occupancy and...

  • Page 64
    .... Management believes that due to lower operating margins predicted for fiscal 2009, there may be slightly less revenue recognized by...5.0% 17.5% 28.5% 2.2% 30.7% 3.9% 26.8% Net sales Cost of goods sold Gross profit Operating expenses: Selling, general and administrative Research and development ...

  • Page 65
    ...Net sales Cost of goods sold Gross profit Research and development Selling, general and administrative expenses Total expenses Operating income Other income / (expense), net Income before income taxes Outdoor/ Fitness $427,783 181,037 246,746 25,419 60,732 86,151 160,595 5,391 $165,986 Marine $204...

  • Page 66
    .../Fitness Marine Automotive/Mobile Aviation Total 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...

  • Page 67
    ...406 5.0% Year over Year $ Change % Change $2,117 9.1% 2,495 14.8% 26,220 44.1% 15,871 26.5% $46,703 29.3% Outdoor/Fitness Marine Automotive/Mobile Aviation Total The increase in research and development expense dollars was due to ongoing development activities for new products, the addition of 350...

  • Page 68
    ...impact on the Company's financial statements. The $35.3 million currency loss in 2008 was related to the strengthening of the U.S. Dollar offset by a gain associated with the sales and tender of our Tele Atlas N.V. shares. During 2008, the Taiwan Dollar weakened 1.6% in comparison to the U.S. Dollar...

  • Page 69
    ... feature sets, and products featuring high sensitivity GPS capabilities increased sales of our marine and outdoor fitness segments. The increase in aviation sales for fiscal 2007 was primarily due to increased sales from panel mount products sold into the OEM (original equipment manufacturers) and...

  • Page 70
    ... advertising to increase brand awareness and promote our automotive products, increased information technology staffing and support costs, increased staffing in our sales and marketing group to increase focus on specific target markets, and additional staffing in our customer call center. Research...

  • Page 71
    ... receivable and inventories that contributed to cash generated by operations in 2008. Accounts payable also decreased representing a use of cash. We are focused on reducing accounts receivable days outstanding as we negotiate shorter payment terms with our customers. With regard to inventory, we...

  • Page 72
    ... France SAS, Garmin Deutschland GmbH, Garmin Iberia S.A., Garmin Italia S.p.A., and the assets of Nautamatic Marine Systems, Inc. for a total of $128.8 million, the net sale of $112.8 million of fixed income securities associated with the investment of our on-hand cash balances and the purchase...

  • Page 73
    ... any off-balance sheet arrangements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Sensitivity We have market risk primarily in connection with the pricing of our products and services and the purchase of raw materials. Product pricing and raw materials costs are both...

  • Page 74
    ... purchase of the Tele Atlas N.V. shares in October 2007 to the dates of sale and tender in February, March, and June 2008. The net result of these currency moves combined with other losses of $0.3 million, and the timing of transactions during the year for a net loss of $35.3 million for the Company...

  • Page 75
    ...Data CONSOLIDATED FINANCIAL STATEMENTS Garmin Ltd. and Subsidiaries Years Ended December 27, 2008, December 29, 2007 and December 30, 2006 Contents Report of Ernst & Young LLP, Independent Registered Public Accounting Firm...54 Consolidated Balance...Statements of Cash Flows for the Years December...

  • Page 76
    ... in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Garmin Ltd.'s internal control...

  • Page 77
    ...Note 2) Land and improvements Building and improvements Office furniture and equipment Manufacturing equipment Engineering equipment Vehicles Accumulated depreciation 88,272 244,804 72,665 113,956 59,009 14,698 593,404 (148,152) 445,252 Restricted cash (Note 4) Marketable securities (Note 3) License...

  • Page 78
    Garmin Ltd. And Subsidiaries Consolidated Statements of Income (In Thousands, Except Per Share Information) Fiscal Year Ended December 27, 2008 Net sales Cost of goods sold Gross profit Selling, general and administrative expenses Research and development expense Operating income Other income (...

  • Page 79
    ... Except Share and Per Share Information) Balance at December 31, 2005 Net income Translation adjustment Adjustment related to unrealized gains (losses) on available-for-sale securities, net of income tax effects of $355 Comprehensive income Dividends paid Tax benefit from exercise of employee stock...

  • Page 80
    ...by operating activities Investing activities: Purchases of property and equipment Proceeds from sale of property and equipment Purchase of intangible assets Purchase of marketable securities Redemption of marketable securities Acquistions, net of cash acquired Change in restricted cash Net cash used...

  • Page 81
    ... disclosures of cash flow information Cash paid during the year for income taxes Cash received during the year from income tax refunds Cash paid during the year for interest Supplemental disclosure of non-cash investing and financing activities Change in marketable securities related to unrealized...

  • Page 82
    ..., Except Share and Per Share Information) December 27, 2008 and December 29, 2007 1. Description of the Business Garmin Ltd. and subsidiaries (together, the "Company") manufacture, market, and distribute Global Positioning System-enabled products and other related products. Garmin Corporation (GC...

  • Page 83
    ... hand, operating accounts, money market funds, and securities with maturities of three months or less when purchased. The carrying amount of cash and cash equivalents approximates fair value, given the short maturity of those instruments. Trade Accounts Receivable We sell our products to retailers...

  • Page 84
    Buildings and improvements Office furniture and equipment Manufacturing and engineering equipment Vehicles 39 5 5 5 Long-Lived Assets In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews long-lived assets for impairment whenever ...

  • Page 85
    ...965, respectively. Marketable Securities Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. All of the Company's marketable securities are considered available-for-sale at December 27...

  • Page 86
    ... Company's product sales, these criteria are met at the time the product is delivered to the customer's location. The Company assumes no remaining significant obligations associated with the product sale other than that related to its warranty programs discussed below. Shipping and Handling Costs...

  • Page 87
    ... revenue is recognized. We accrue the estimated cost of providing this free support upon product shipment. Software Development Costs Statement of Financial Accounting Standards (SFAS) 86, "Accounting for Costs of Computer Software to be Sold, Leased, or otherwise Marketed," requires companies...

  • Page 88
    ... value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as stock-based compensation expenses over the requisite service period in the Company's consolidated financial statements...

  • Page 89
    .... Cash flows were projected for the issuing trusts, taking into account underlying loan principal, bonds outstanding, and payout formulas. Taking this information into account, assumptions were made as to the yields likely to be required, based upon then current market conditions for comparable...

  • Page 90
    ... subdivisions U.S. corporate bonds Other Total Amortized Cost $137,854 92,850 40,336 16,545 9,502 $297,087 Gross Unrealized Gains/(Losses) $1,044 (21,547) 948 (2,507) (130) ($22,192) The following is a summary of the Company's marketable securities classified as available-for-sale securities at...

  • Page 91
    ... by a bank securing payment of the United Kingdom value-added tax requirements. The total amount of restricted cash balances were $1,941 and $1,554 at December 27, 2008 and December 29, 2007, respectively. In the normal course of business, the Company and its subsidiaries are parties to various...

  • Page 92
    ...retirement plan under which its employees may contribute up to 50% of their annual compensation subject to Internal Revenue Code maximum limitations and to which GII contributes a specified percentage of each participant's annual compensation up to certain limits as defined in the Plan. Additionally...

  • Page 93
    ... of the Company's deferred tax assets and liabilities are as follows: December 27, 2008 Deferred tax assets: Product warranty accruals Allowance for doubtful accounts Inventory reserves Sales program allowances Reserve for sales returns Other accrual Unrealized intercompany profit in inventory...

  • Page 94
    .../mobile, and outdoor/fitness segments include portable global positioning system (GPS) receivers and accessories sold primarily to retail outlets. These products are produced primarily by the Company's subsidiary in Taiwan. The Company's aviation products are portable and panel mount avionics...

  • Page 95
    ... 952,513 505,467 Aviation Net sales to external customers Allocated interest income Allocated interest expense Income before income taxes Assets: Accounts receivable Inventories $232,906 1,952 49 86,141 52,978 35,580 Fiscal Year Ended December 30, 2006 Outdoor/ Auto/ Fitness Marine Mobile $285,362...

  • Page 96
    ...,922 431,795 $87,048 65,280 1,074,827 $593,371 36,786 51,277 $1,774,000 250,988 1,557,899 Best Buy, a customer in the outdoor/fitness, marine, and auto/mobile segments, accounted for 12.0% of the Company's consolidated net sales in the year ended December 27, 2008. 9. Stock Compensation Plans...

  • Page 97
    ..., and 7,630 shares, respectively, were granted under this plan. Stock-Based Compensation Activity A summary of the Company's stock-based compensation activity and related information under the 2005 Equity Incentive Plan, the 2000 Equity Incentive Plan and the 2000 Non-employee Directors' Option Plan...

  • Page 98
    ... fair market value on the enrollment date. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code. During 2008, 2007, and 2006, 362,902, 120,230, and 124,693 shares, respectively were purchased under the plan for a total purchase price of...

  • Page 99
    ... effect was antidilutive. 11. Share Repurchase Program The Board of Directors approved a share repurchase program on October 22, 2008, authorizing the Company to purchase up to $300 million of its common shares as market and business conditions warrant. The share repurchase authorization expires on...

  • Page 100
    .... acquired Sportmanship International AB, the distributor of Garmin's consumer products in Sweden. Sportmanship International AB has been renamed Garmin Sweden AB. These companies were acquired for $76.6 million less $16.5 million cash acquired. The preliminary purchase price allocation resulted in...

  • Page 101
    ... companies' navigation and mobile telephony expertise to design, manufacture and distribute cobranded location-centric mobile phones. The mobile phone product line will be known as the Garmin-Asus nüvifoneTM series. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial...

  • Page 102
    ... Based on the evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. (b) Management's Report on Internal Control over Financial Reporting Management of the Company is responsible for establishing and maintaining...

  • Page 103
    ...management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal...

  • Page 104
    ... with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Garmin Ltd. and Subsidiaries as of December 27, 2008 and December 29, 2007 and the related consolidated statements of income, stockholders' equity, and cash flows for each of the...

  • Page 105
    ... listing standards of the Nasdaq Stock Market. (e) Code of Ethics Garmin's Board of Directors has adopted the Code of Conduct of Garmin Ltd. and Subsidiaries (the "Code"). The Code is applicable to all Garmin employees including the Chairman and Chief Executive Officer, the President and Chief...

  • Page 106
    ...858 $47.76 2,316,234 (1) Consists of the Garmin Ltd. 2005 Equity Incentive Plan, the Garmin Ltd. 2000 Equity Incentive Plan, the Garmin Ltd. 2000 Non-Employee Directors' Option Plan and the Garmin Ltd. Employee Stock Purchase Plan. The Company has no knowledge of any arrangement, the operation of...

  • Page 107
    ... and "The Board of Directors" in the Proxy Statement is hereby incorporated herein by reference in partial response to this Item 13. Item 14. Principal Accounting Fees and Services The information set forth under the headings "Audit Matters -- Independent Registered Public Accounting Firm Fees" and...

  • Page 108
    ... Employees of Garmin Corporation (incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 8-K filed on September 7, 2004). Form of Stock Option Agreement pursuant to the Garmin Ltd. 2000 Equity Incentive Plan for UK-Approved Stock Options for Employees of Garmin (Europe...

  • Page 109
    ...10.4) of the Registrant's Quarterly Report on Form 10-Q filed on May 8, 2007. Amended and Restated Garmin Ltd. Employee Stock Purchase Plan effective January 1, 2008. Form of Time Vested Restricted Stock Unit Award Agreement under the Garmin Ltd. 2005 Equity Incentive Plan (incorporated by reference...

  • Page 110
    ....20 14.1 21.1 23.1 24.1 31.1 Best Buy Vendor Program Agreement dated February 29, 2008 Code of Conduct of Garmin Ltd. and Subsidiaries. List of subsidiaries Consent of Ernst & Young LLP Power of Attorney (included in signature page) Chief Executive Officer's Certification pursuant to Section 302 of...

  • Page 111
    ... Inventory reserve Total Year Ended December 30, 2006: Deducted from asset accounts Allowance for doubtful accounts Inventory reserve Total Balance at Beginning of Period Additions Charged to Charged to Costs and Other Expenses Accounts Deductions Balance at End of Period $10,246 31,186 $41,432...

  • Page 112
    ... Min H. Kao Min H. Kao Chairman, Chief Executive Officer and Director (Principal Executive Officer) /s/ Gene M. Betts Gene M. Betts Director /s/ Kevin Rauckman Kevin Rauckman (Principal Financial Officer and Principal Accounting Officer) Chief Financial Officer and Treasurer /s/ Charles W. Peffer...

  • Page 113
    ... find investor relations information on the company's website at www.garmin.com/stock. Offices Garmin Ltd. P.O. Box 10670 45 Market Street Suite 3206B Gardenia Court Camana Bay Grand Cayman KY1-1006 Cayman Islands Garmin International, Inc. 1200 East 151st Street Olathe, Kansas, 66062 United States...

  • Page 114
    Garmin Ltd. P.O. Box 10670 45 Market Street Suite 3206B Gardenia Court Camana Bay Grand Cayman KY1-1006 Cayman Islands (345) 640.9050 www.garmin.com ©2009 Garmin Ltd. All rights reserved. M00-60237-00 0409