Garmin Ltd. (NYSE: GRMN), announced results for the first quarter ended March 26, 2022. Highlights for first quarter 2022 include:
• Record consolidated revenue of $1.17 billion, a 9% increase over the prior year quarter with three
segments posting double digit growth
• Gross and operating margins were 56.5% and 19.5%, respectively
• Operating income of $229 million, an 8% decrease compared to the prior year quarter
• GAAP EPS was $1.09 and pro forma EPS was $1.11
• Launched a sweeping update to our lineup of outdoor adventure watches
• Named the 2022 Associate Member of the Year by the Aircraft Electronics Association, and for the
18th consecutive year, ranked 1st place in Professional Pilot Magazine’s 2022 Avionics Product Support
• Unveiled LiveScope Plus a high-resolution live sonar that raises the performance bar in the recreational
“We delivered another quarter of growth and record revenue in an increasingly complex and challenging
business environment,” said Cliff Pemble, President and CEO of Garmin. “High freight cost and component supply challenges persist while new headwinds emerge such as the strengthening of the U.S. dollar and the uncertainty created by Russia’s invasion of Ukraine. In this dynamic environment, we remain focused on creating highly differentiated products that excite our customers and lead to success.”
Revenue from the marine segment grew 21% in the first quarter with growth across multiple categories led by strong demand for chartplotters. Gross and operating margins were 51% and 23%, respectively, resulting in $59 million of operating income. During the quarter, Garmin launched the new LiveScope Plus with enhanced resolution, clearer images and improved target separation. Also during the quarter, LiveScope technology helped sponsored fishing pro Jason Christie win the 2022 Bassmaster Classic, which drew more than 150,000 spectators over a three day period.
Total operating expenses in the first quarter were $434 million, an 11% increase over the prior year. Research and development increased by 11%, primarily due to engineering personnel costs. Selling, general and administrative expenses increased 11%, driven primarily by personnel related expenses and information technology costs. Advertising increased 10% over the prior year quarter primarily due to higher spend in the outdoor and marine segments.
The effective tax rate in the first quarter was 10.3% compared to 12.2% in the prior year quarter. The year over year decrease in the effective tax rate is primarily due to an increase in U.S. tax deductions and credits. In the first quarter of 2022, Garmin generated approximately $126 million of free cash flow, and paid a quarterly dividend of approximately $129 million. The company ended the quarter with cash and marketable securities of approximately $3 billion.