Unassociated Document
United States
Securities and Exchange Commission
Washington, D.C. 20549

FORM 10-Q

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 28, 2009

or

o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to             

Commission file number 0-31983
________________

GARMIN LTD.
(Exact name of Company as specified in its charter)

Cayman Islands
(State or other jurisdiction
of incorporation or organization)
98-0229227
(I.R.S. Employer identification no.)
   
P.O. Box 10670, Grand Cayman KY1-1006
Suite 3206B, 45 Market Street, Gardenia Court
Camana Bay, Cayman Islands
(Address of principal executive offices)
N/A
(Zip Code)

Company's telephone number, including area code:  (345) 640-9050

 (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer þ    Accelerated Filer o     Non-accelerated Filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ


Number of shares outstanding of the Company's common shares as of May 1, 2009
Common Shares, $.005 par value:  200,291,184
 


Garmin Ltd.
Form 10-Q
Quarter Ended March 28, 2009

Table of Contents
Part I - Financial Information
Page
     
Item 1.
  Condensed Consolidated Financial Statements
3
     
 
  Introductory Comments
3
     
 
  Condensed Consolidated Balance Sheets at March 28, 2009 (Unaudited)
 
 
  and December 27, 2008
4
     
 
  Condensed Consolidated Statements of Income for the
 
 
  13-weeks ended March 28, 2009 and March 29, 2008 (Unaudited)
5
     
 
  Condensed Consolidated Statements of Cash Flows for the
 
 
  13-weeks ended March 28, 2009 and March 29, 2008 (Unaudited)
6
     
 
  Notes to Condensed Consolidated Financial Statements (Unaudited)
7
     
Item 2.
  Management's Discussion and Analysis of
 
 
  Financial Condition and Results of Operations
12
     
Item 3.
  Quantitative and Qualitative Disclosures About
 
 
  Market Risk
19
     
Item 4.
  Controls and Procedures
20
     
Part II - Other Information
 
     
Item 1.
Legal Proceedings
21
 
   
Item 1A.
Risk Factors
22
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
22
     
Item 3.
Defaults Upon Senior Securities
22
     
Item 4.
Submission of Matters to a Vote of Securities Holders
23
     
Item 5.
Other Information
23
     
Item 6.
Exhibits
24
     
25
     
Index to Exhibits
26
 


Garmin Ltd.
Form 10-Q
Quarter Ended March 28, 2009

Part I – Financial Information
 
Item 1.  Condensed Consolidated Financial Statements
 
Introductory Comments

The Condensed Consolidated Financial Statements of Garmin Ltd. ("Garmin" or the "Company") included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission.  Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to enable a reasonable understanding of the information presented.  These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 27, 2008.  Additionally, the Condensed Consolidated Financial Statements should be read in conjunction with Item 2 of Management's Discussion and Analysis of Financial Condition and Results of Operations, included in this Form 10-Q.

The results of operations for the 13-week period ended March 28, 2009 are not necessarily indicative of the results to be expected for the full year 2009.
 
3

 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share information)

       
   
(Unaudited)
       
   
March 28,
   
December 27,
 
   
2009
   
2008
 
Assets
           
Current assets:
           
     Cash and cash equivalents
  $ 922,329     $ 696,335  
     Marketable securities
    15,747       12,886  
     Accounts receivable, net
    420,081       741,321  
     Inventories, net
    353,532       425,312  
     Deferred income taxes
    60,795       49,825  
     Prepaid expenses and other current assets
    55,348       58,746  
                 
Total current assets
    1,827,832       1,984,425  
                 
Property and equipment, net
    440,611       445,252  
                 
Marketable securities
    303,636       262,009  
Restricted cash
    1,898       1,941  
Licensing agreements, net
    11,521       16,013  
Other intangible assets, net
    208,691       214,941  
                 
Total assets
  $ 2,794,189     $ 2,924,581  
                 
Liabilities and Stockholders' Equity
               
Current liabilities:
               
     Accounts payable
  $ 79,453     $ 160,094  
     Salaries and benefits payable
    28,426       34,241  
     Accrued warranty costs
    68,847       87,408  
     Accrued sales program costs
    58,039       90,337  
     Other accrued expenses
    47,083       87,021  
     Income taxes payable
    20,314       20,075  
                 
Total current liabilities
    302,162       479,176  
                 
Deferred income taxes
    11,951       4,070  
Non-current taxes
    220,450       214,366  
Other liabilities
    1,153       1,115  
                 
Stockholders' equity:
               
     Common stock, $0.005 par value, 1,000,000,000 shares authorized:
         
        Issued and outstanding shares - 200,282,000 as of
               
            March 28, 2009 and 200,363,000 as of
               
            December 27, 2008
    1,000       1,002  
     Additional paid-in capital
    8,885       -  
     Retained earnings
    2,311,044       2,262,503  
     Accumulated other comprehensive gain/(loss)
    (62,456 )     (37,651 )
                 
Total stockholders' equity
    2,258,473       2,225,854  
Total liabilities and stockholders' equity
  $ 2,794,189     $ 2,924,581  
 
See accompanying notes.           
                                                                                            
4

 
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)

   
13-Weeks Ended
 
   
March 28,
   
March 29,
 
   
2009
   
2008
 
             
Net sales
  $ 436,699     $ 663,805  
                 
Cost  of goods sold
    240,704       343,690  
                 
Gross profit
    195,995       320,115  
                 
     Advertising expense
    23,225       38,129  
     Selling, general and administrative expense
    59,777       59,696  
     Research and development expense
    55,034       49,558  
Total operating expense
    138,036       147,383  
                 
Operating income
    57,959       172,732  
                 
     Interest income
    5,097       8,327  
     Foreign currency
    (2,438 )     (3,999 )
     Other
    (694 )     5,383  
Total other income (expense)
    1,965       9,711  
                 
Income before income taxes
    59,924       182,443  
                 
Income tax provision
    11,386       34,664  
                 
Net income
  $ 48,538     $ 147,779  
                 
Net income per share:
               
     Basic
  $ 0.24     $ 0.68  
     Diluted
  $ 0.24     $ 0.67  
                 
Weighted average common
               
     shares outstanding:
               
     Basic
    200,352       216,505  
     Diluted
    200,725       218,979  
 
See accompanying notes.                                                                                          

5


Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 
   
13-Weeks Ended
 
   
March 28,
   
March 29,
 
   
2009
   
2008
 
Operating Activities:
           
Net income
  $ 48,538     $ 147,779  
Adjustments to reconcile net income to net cash
               
provided by operating activities:
               
Depreciation
    13,574       9,861  
Amortization
    8,088       7,775  
Gain on sale of property and equipment
    (3 )     (1 )
Provision for doubtful accounts
    (1,101 )     350  
Deferred income taxes
    (3,200 )     17,067  
Foreign currency transaction gains/losses
    (420 )     64,946  
Provision for obsolete and slow moving inventories
    7,709       11,669  
Stock compensation expense
    10,587       9,124  
Realized losses/(gains) on marketable securities
    1,274       (5,245 )
Changes in operating assets and liabilities, net of acquisitions:
         
Accounts receivable
    318,095       458,821  
Inventories
    58,876       (169,501 )
Other current assets
    (1,128 )     9,946  
Accounts payable
    (77,595 )     (159,590 )
Other current and non-current liabilities
    (88,727 )     (137,588 )
Income taxes payable
    3,993       (60,701 )
Purchase of licenses
    856       (12,247 )
Net cash provided by operating activities
    299,416       192,465  
                 
Investing activities:
               
Purchases of property and equipment
    (13,136 )     (26,690 )
Proceeds from sale of property and equipment
    -       8  
Purchase of intangible assets
    (872 )     (2,562 )
Purchase of marketable securities
    (68,662 )     (265,758 )
Redemption of marketable securities
    16,638       102,374  
Change in restricted cash
    43       (11 )
Acquisitions, net of cash acquired
    -       (23,725 )
Net cash used in investing activities
    (65,989 )     (216,364 )
                 
Financing activities:
               
Proceeds from issuance of common stock from
               
  stock purchase plan
    119       1,524  
Stock repurchase
    (1,849 )     (90,050 )
Tax benefit related to stock option exercise
    26       1,633  
Net cash used in financing activities
    (1,704 )     (86,893 )
                 
Effect of exchange rate changes on cash and cash equivalents
    (5,729 )     1,918  
                 
Net increase/(decrease) in cash and cash equivalents
    225,994       (108,874 )
Cash and cash equivalents at beginning of period
    696,335       707,689  
Cash and cash equivalents at end of period
  $ 922,329     $ 598,815  

See accompanying notes.
 
6

 
Garmin Ltd. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

March 28, 2009
(In thousands, except share and per share information)


1.
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the 13-week period ended March 28, 2009 are not necessarily indicative of the results that may be expected for the year ending December 26, 2009.

The condensed consolidated balance sheet at December 27, 2008 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 27, 2008.

The Company’s fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year.  Therefore the financial results of certain fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13-weeks.  The quarters ended March 28, 2009 and March 29, 2008 both contain operating results for 13-weeks for both year-to-date periods.


2.
Inventories

The components of inventories consist of the following:
 
   
March 28, 2009
   
December 27, 2008
 
             
Raw Materials
  $ 137,491     $ 151,132  
Work-in-process
    34,890       28,759  
Finished goods
    208,684       268,625  
Inventory Reserves
    (27,533     (23,204
Inventory, net of reserves
  $ 353,532     $ 425,312  
 
3.
Share Repurchase Plan

The Board of Directors approved a share repurchase program on October 22, 2008, authorizing the Company to purchase up to $300,000 of its common shares as market and business conditions warrant.   The share repurchase authorization expires on December 31, 2009.   In the quarter ended March 28, 2009, the Company repurchased 117,600 shares using cash of $1,849.  There remains approximately $256,000 available for repurchase under this authorization given the $42,000 of purchases in fiscal 2008.
 
7



4.
Earnings Per Share

The following table sets forth the computation of basic and diluted net income per share:
 
   
13-Weeks Ended
 
   
March 28,
   
March 29,
 
   
2009
   
2008
 
Numerator:
           
    Numerator for basic and diluted net income
           
        per share - net income
  $ 48,538     $ 147,779  
                 
Denominator:
               
    Denominator for basic net income per share –
               
        weighted-average common shares
    200,352       216,505  
                 
    Effect of dilutive securities –
               
        employee stock options
    373       2,474  
                 
    Denominator for diluted net income per share –
               
        adjusted weighted-average common shares
    200,725       218,979  
                 
Basic net income per share
  $ 0.24     $ 0.68  
                 
Diluted net income per share
  $ 0.24     $ 0.67  

There were 9,488,615 anti-dilutive options for the 13-week period ended March 28, 2009.   There were 3,107,431 anti-dilutive options for the 13-week period ended March 29, 2008.

There were 12,098 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended March 28, 2009.
 
5.
Comprehensive Income

Comprehensive income is comprised of the following:

   
13-Weeks Ended
 
   
March 28,
   
March 29,
 
   
2009
   
2008
 
Net income
  $ 48,538     $ 147,779  
Translation adjustment
    (18,763 )     79,794  
Change in fair value of available-for-sale
               
   marketable securities, net of deferred taxes
    (6,042 )     (32,974 )
      Comprehensive income
  $ 23,733     $ 194,599  

 
8

 
6.
Segment Information

Net sales, operating income, and income before taxes for each of the Company’s reportable segments are presented below:
 
     
Reportable Segments
 
     
Outdoor/
         
Auto/
             
     
Fitness
   
Marine
   
Mobile
   
Aviation
   
Total
 
13-Weeks Ended
March 28, 2009
                             
                                 
Net sales
    $ 80,004     $ 38,017     $ 259,586     $ 59,092     $ 436,699  
Operating income
    $ 28,505     $ 10,572     $ 4,605     $ 14,277     $ 57,959  
Income before taxes
    $ 27,660     $ 9,723     $ 9,158     $ 13,383     $ 59,924  
                                           
13-Weeks Ended
March 29, 2008
                                       
                                           
Net sales
    $ 70,495     $ 56,006     $ 451,859     $ 85,445     $ 663,805  
Operating income
    $ 19,311     $ 17,836     $ 107,641     $ 27,944     $ 172,732  
Income before taxes
    $ 20,447     $ 19,333     $ 112,304     $ 30,359     $ 182,443  

Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis.

Net Sales and long-lived assets (property and equipment) by geographic area are as follows as of and for the 13-week periods ended March 28, 2009 and March 29, 2008:
 
   
North
                   
   
America
   
Asia
   
Europe
   
Total
 
March 28, 2009
                       
Net sales to external customers
  $ 264,777     $ 28,140     $ 143,782     $ 436,699  
Long lived assets
  $ 226,384     $ 160,087     $ 54,140     $ 440,611  
                                 
March 29, 2008
                               
Net sales to external customers
  $ 411,432     $ 41,786     $ 210,587     $ 663,805  
Long lived assets
  $ 195,784     $ 150,324     $ 45,893     $ 392,001  
 
7.
Warranty Reserves
 
The Company’s products sold are generally covered by a warranty for periods ranging from one to two years.   The Company’s estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet.   The following reconciliation provides an illustration of changes in the aggregate warranty reserve.
 
   
13-Weeks Ended
 
   
March 28,
   
March 29,
 
   
2009
   
2008
 
             
Balance - beginning of the period
  $ 87,408     $ 71,636  
Accrual for products sold
               
    during the period
    23,993       35,321  
Expenditures
    (42,554 )     (34,206 )
Balance - end of the period
  $ 68,847     $ 72,751  
 
9

 
8.
Commitments

Pursuant to certain supply agreements, the Company is contractually committed to make purchases of approximately $37,200 over the next 5 years.

9. 
Income Taxes

Our earnings before taxes decreased 67% when compared to the same quarter in 2008, and our income tax expense decreased by $23,278, to $11,386 for the 13-week period ended March 28, 2009, from $34,664 for the 13-week period ended March 29, 2008.  The effective tax rate was 19.0% in the first quarter of 2009 and the first quarter of 2008.
 
10. 
Fair Value Measurements
 
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements. The Company adopted SFAS No. 157 effective December 30, 2007.
 
SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).  SFAS No. 157 classifies the inputs used to measure fair value into the following hierarchy:
 
Level 1  
Unadjusted quoted prices in active markets for identical assets or liability
   
Level 2      
Unadjusted quoted prices in active markets for similar assets or liabilities, or
   
  Unadjusted quoted prices for identical or similar assets
   
Level 3
Unobservable inputs for the asset or liability
 
The Company endeavors to utilize the best available information in measuring fair value.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
 
Assets and liabilities measured at estimated fair value on a recurring basis are summarized below:
 
   
Fair Value Measurements as
 
   
of March 28, 2009
 
                         
Description
 
Total
   
Level 1
   
Level 2
   
Level 3
 
                         
Available for-sale securites
  $ 253,839     $ 253,839       -       -  
Failed Auction rate securities
    65,544       -       -       65,544  
                                 
Total
  $ 319,383     $ 253,839     $ -     $ 65,544  
 
10

 
For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, SFAS No. 157 requires a reconciliation of the beginning and ending balances, separately for each major category of assets.  The reconciliation is as follows:
 
 
   
Fair Value Measurements Using
   
Significant Unobservable Inputs (Level 3)
     
13-Weeks Ended
     
Mar 28, 2009
         
Beginning balance of auction rate securities
  $
71,303
 
Total unrealized losses included in other
       
  comprehensive income
   
(5,759)
 
Purchases in and/or out of Level 3
   
-
 
Transfers in and/or out of Level 3
   
-
 
Ending balance of auction rate securities
  $
65,544
 
 
11. 
Recently Issued Accounting Pronouncements
 
In May 2008, the FASB issued EITF 07-1, Accounting for Collaborative Arrangements.  EITF Issue 07-1 requires entities entering into collaborative arrangements in which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards that depend on the commercial success of the joint operating activity to make specific disclosures regarding that arrangement.  Garmin announced a strategic alliance with ASUSTeK Computer Inc. on February 4, 2009 that will leverage the companies’ navigation and mobile telephony expertise to design, manufacture and distribute co-branded location-centric mobile phones.  The mobile phone product line will be known as the Garmin-Asus nüvifone series.  The Company has adopted EITF Issue 07-1 and the strategic alliance did not have a material impact on the Company’s financial condition or operating results in the first quarter of 2009.

In April 2009, the FASB released FASB Staff Position (FSP) SFAS 107-1 and Accounting Principles Board (APB) Opinion No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (SFAS 107-1 and APB 28-1).  This FSP amends FASB Statement No. 107, “Disclosures about Fair Values of Financial Instruments,” to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements.  The FSP also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in all interim financial statements.  This FSP is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009.  The Company plans to adopt SFAS 107-1 and APB 28-1 and provide the additional disclosure requirements for second quarter 2009.

In April 2009, the FASB released FASB Staff Position SFAS 157-4, “Determining Whether a Market Is Not Active and a Transaction Is Not Distressed” (SFAS 157-4).  This FSP provides additional guidance in determining whether a market for a financial asset is not active and a transaction is not distressed for fair value measurement purposes as defined in SFAS 157, “Fair Value Measurements.”  SFAS 157-4 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009.  The Company plans to adopt the provisions of SFAS 157-4 during second quarter 2009, but does not believe this guidance will have a significant impact on the Company’s financial position, cash flows, or disclosures.

In April 2009, the FASB issued FASB Staff Position SFAS 115-2 and SFAS 124-2 “Recognition and Presentation of Other-Than-Temporary Impairments.”  This FSP provides guidance in determining whether impairments in debt securities are other than temporary, and modifies the presentation and disclosures surrounding such instruments.  This FSP is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009.  The Company plans to adopt the provisions of this Proposed Staff Position during second quarter 2009, but does not believe this guidance will have a significant impact on the Company’s financial position, cash flows, or disclosures.
 
11


Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion set forth below, as well as other portions of this Quarterly Report, contains statements concerning potential future events.  Such forward-looking statements are based upon assumptions by our management, as of the date of this Quarterly Report, including assumptions about risks and uncertainties faced by the Company.  Readers can identify these forward-looking statements by their use of such verbs as expects, anticipates, believes or similar verbs or conjugations of such verbs.  If any of our assumptions prove incorrect or should unanticipated circumstances arise, our actual results could materially differ from those anticipated by such forward-looking statements.  The differences could be caused by a number of factors or combination of factors including, but not limited to, those factors identified in the Company’s Annual Report on Form 10-K for the year ended December 27, 2008.  This report has been filed with the Securities and Exchange Commission (the "SEC" or the "Commission") in Washington, D.C. and can be obtained by contacting the SEC's public reference operations or obtaining it through the SEC's web site on the World Wide Web at http://www.sec.gov.  Readers are strongly encouraged to consider those factors when evaluating any forward-looking statement concerning the Company.  The Company will not update any forward-looking statements in this Quarterly Report to reflect future events or developments.

The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in this Form 10-Q and the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 27, 2008.

The Company is 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, the outdoor/fitness, marine, automotive/mobile and aviation markets.  Our segments offer products through our network of independent dealers and distributors.  However, the nature of products and types of customers for the four segments may vary significantly.  As such, the segments are managed separately.
 
12


Results of Operations

The following table sets forth our results of operations as a percentage of net sales during the periods shown:
 
   
13-Weeks Ended
 
   
March 28, 2009
   
March 29, 2008
 
             
Net sales
    100.0 %     100.0 %
Cost of goods sold
    55.1 %     51.8 %
Gross profit
    44.9 %     48.2 %
Advertising
    5.3 %     5.7 %
Selling, general and administrative
    13.7 %     9.0 %
Research and development
    12.6 %     7.5 %
Total operating expenses
    31.6 %     22.2 %
Operating income
    13.3 %     26.0 %
Other income (expense), net
    0.4 %     1.5 %
Income before income taxes
    13.7 %     27.5 %
Provision for income taxes
    2.6 %     5.2 %
Net income
    11.1 %     22.3 %
 
The Company manages its operations in four segments: outdoor/fitness, marine, automotive/mobile, and aviation, and each of its segments employs the same accounting policies. Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis.   The following table sets forth our results of operations (in thousands) including revenue (net sales), gross profit, and operating income for each of our four segments during the periods shown.  For each line item in the table, the total of the outdoor/fitness, marine, automotive/mobile, and aviation segments' amounts equals the amount in the condensed consolidated statements of income included in Item 1.
 
     
Reportable Segments
 
     
Outdoor/
         
Auto/
             
     
Fitness
   
Marine
   
Mobile
   
Aviation
   
Total
 
13-Weeks Ended
March 28, 2009
                             
                                 
Net sales
    $ 80,004     $ 38,017     $ 259,586     $ 59,092     $ 436,699  
Operating income
    $ 28,505     $ 10,572     $ 4,605     $ 14,277     $ 57,959  
Income before taxes
  $ 27,660     $ 9,723     $ 9,158     $ 13,383     $ 59,924  
                                           
13-Weeks Ended
March 29, 2008
                                       
                                           
Net sales
    $ 70,495     $ 56,006     $ 451,859     $ 85,445     $ 663,805  
Operating income
    $ 19,311     $ 17,836     $ 107,641     $ 27,944     $ 172,732  
Income before taxes
  $ 20,447     $ 19,333     $ 112,304     $ 30,359     $ 182,443  
 
13

 
Comparison of 13-Weeks Ended March 28, 2009 and March 29, 2008
(Amounts included in the following discussion are stated in thousands unless otherwise indicated)

Net Sales
 
   
13-weeks ended March 28, 2009
   
13-weeks ended March 29, 2008
   
Quarter over Quarter
 
   
Net Sales
   
% of Revenues
   
Net Sales
   
% of Revenues
   
$ Change
   
% Change
 
Outdoor/Fitness
  $ 80,004       18.3 %   $ 70,495       10.6 %   $ 9,509       13.5 %
Marine
    38,017       8.7 %     56,006       8.4 %     (17,989 )     -32.1 %
Automotive/Mobile
    259,586       59.5 %     451,859       68.1 %     (192,273 )     -42.6 %
Aviation
    59,092       13.5 %     85,445       12.9 %     (26,353 )     -30.8 %
Total
  $ 436,699       100.0 %   $ 663,805       100.0 %   $ (227,106 )     -34.2 %

Net sales decreased 34.2% for the 13-week period ended March 28, 2009 when compared to the year-ago quarter.  The decline was driven by the automotive/mobile segment, as well as aviation and marine.  These declines were partially offset by a 13.5% increase in outdoor/fitness.  Automotive/mobile revenue remains the largest portion of our revenue mix, but declined from 68.1% in the first quarter of 2008 to 59.5% in the first quarter of 2009.

Total unit sales decreased 13% to 2,416,000 in the first quarter of 2009 from 2,787,000 in the same period of 2008.   The lower unit sales volume in the first quarter of fiscal 2009 was attributable to declining volumes in automotive, aviation and marine products offset by unit growth in the outdoor/fitness segment.

Automotive/mobile segment revenue declined the most during the quarter, down 43% from the year-ago quarter, as the average selling price declined due to price protection credits offered to our retail partners and retailers significantly reduced inventory levels.  This segment is also being slowed due to global macroeconomic conditions which have impacted all geographies.  The aviation and marine segments declined 31% and 32%, respectively, from the year-ago quarter as both industries experience significant slowdowns associated with the macroeconomic conditions.  Revenues in our outdoor/fitness segment grew relative to the first quarter of 2008 due to ongoing channel penetration and market share gains of our fitness products.

Gross Profit
 
   
13-weeks ended March 28, 2009
   
13-weeks ended March 29, 2008
   
Quarter over Quarter
 
   
Gross Profit
   
% of Revenues
   
Gross Profit
   
% of Revenues
   
$ Change
   
% Change
 
Outdoor/Fitness
  $ 48,424       60.5 %   $ 37,439       53.1 %   $ 10,985       29.3 %
Marine
  $ 22,878       60.2 %     32,463       58.0 %     (9,585 )     -29.5 %
Automotive/Mobile
  $ 84,183       32.4 %     195,894       43.4 %     (111,711 )     -57.0 %
Aviation
  $ 40,510       68.6 %     54,319       63.6 %     (13,809 )     -25.4 %
Total
  $ 195,995       44.9 %   $ 320,115       48.2 %   $ (124,120 )     -38.8 %

Gross profit dollars in the first quarter of 2009 fell 38.8% and gross profit margin fell 330 basis points compared to the first quarter of 2008.  First quarter gross profit margins decreased to 32.4% from 43.4% in the automotive/mobile segment, when compared to the same quarter in 2008.   First quarter 2009 gross profit margins increased in the outdoor/fitness, aviation and marine segments when compared with the first quarter of 2008.

Gross profit margin percentage for the Company overall fell as a result of the margin decline in the automotive/mobile segment.   The automotive/mobile segment’s margin fell 11% as the average selling price decline was only partially offset by per unit cost reductions.  The impact to total company gross margin of the automotive/mobile segment declined as it fell to 43.0% of total gross margin from 61.2% in the year-ago quarter.  The Company benefited from increased margins in the outdoor/fitness, aviation and marine segments due to stable pricing and decreases in per unit costs.  Gross margins were most improved in the outdoor/fitness segment which saw an increase of 740 basis points from the year ago quarter, as pricing increased following the promotional holiday period.  Aviation and marine gross margins increased 500 basis points and 220 basis points, respectively, from the year-ago quarter.

14


Advertising Expense

   
13-weeks ended March 28, 2009
   
13-weeks ended March 29, 2008
   
Quarter over Quarter
 
   
Advertising
   
% of Revenues
   
Advertising
   
% of Revenues
   
$ Change
   
% Change
 
Outdoor/Fitness
  $ 2,698       3.4 %   $ 4,969       7.0 %   $ (2,271 )     -45.7 %
Marine
  $ 1,745       4.6 %     4,108       7.3 %     (2,363 )     -57.5 %
Automotive/Mobile
  $ 17,662       6.8 %     27,977       6.2 %     (10,315 )     -36.9 %
Aviation
  $ 1,120       1.9 %     1,075       1.3 %     45       4.2 %
Total
  $ 23,225       5.3 %   $ 38,129       5.7 %   $ (14,904 )     -39.1 %
 
Advertising expense decreased both as a percentage of sales and in absolute dollars when compared with the year-ago period.  As a percent of sales, advertising expenses declined to 5.3% in the first quarter of 2009 compared to 5.7% in first quarter of 2008.  The decrease was a result of actions taken by the Company to reduce costs as the macroeconomic conditions impacted sales across our segments and around the world.
 
Selling, General and Administrative Expense

   
13-weeks ended March 28, 2009
   
13-weeks ended March 29, 2008
   
Quarter over Quarter
 
   
Selling, General & Admin. Expenses
   
% of Revenues
   
Selling, General & Admin. Expenses
   
% of Revenues
   
$ Change
   
% Change
 
Outdoor/Fitness
  $ 11,396       14.2 %   $ 6,961       9.9 %   $ 4,435       63.7 %
Marine
  $ 5,382       14.2 %     5,163       9.2 %     219       4.2 %
Automotive/Mobile
  $ 37,036       14.3 %     41,052       9.1 %     (4,016 )     -9.8 %
Aviation
  $ 5,963       10.1 %     6,520       7.6 %     (557 )     -8.5 %
Total
  $ 59,777       13.7 %   $ 59,696       9.0 %   $ 81       0.1 %

Selling, general and administrative expense was flat in absolute dollars compared to the year-ago quarter as costs throughout the Company were held steady.  As a percent of sales, selling, general and administrative expenses increased from 9.0% of sales in the first quarter of 2008 to 13.7% of sales in the first quarter of 2009, as revenues declined.

Research and Development Expense

   
13-weeks ended March 28, 2009
   
13-weeks ended March 29, 2008
       
   
Research &
         
Research &
         
Quarter over Quarter
 
   
Development
   
% of Revenues
   
Development
   
% of Revenues
   
$ Change
   
% Change
 
Outdoor/Fitness
  $ 5,826       7.3 %   $ 6,198       8.8 %   $ (372 )     -6.0 %
Marine
    5,179       13.6 %     5,356       9.6 %     (177 )     -3.3 %
Automotive/Mobile
    24,880       9.6 %     19,223       4.3 %     5,657       29.4 %
Aviation
    19,149       32.4 %     18,781       22.0 %     368       2.0 %
Total
  $ 55,034       12.6 %   $ 49,558       7.5 %   $ 5,476       11.0 %

The 11.0% increase in research and development expense was due to ongoing development activities for new products and the addition of almost 350 new engineering personnel to our staff since the year-ago quarter as a result of our continued emphasis on product innovation.   Research and development costs increased $5.5 million when compared with the year-ago quarter representing a 510 basis point increase as a percent of revenue, due to the 34% revenue decline.
 
15

 
Operating Income

   
13-weeks ended March 28, 2009
   
13-weeks ended March 29, 2008
   
Quarter over Quarter
 
   
Operating Income
   
% of Revenues
   
Operating Income
   
% of Revenues
   
$ Change
   
% Change
 
Outdoor/Fitness
  $ 28,505       35.6 %   $ 19,311       27.4 %   $ 9,194       47.6 %
Marine
    10,572       27.8 %     17,836       31.8 %     (7,264 )     -40.7 %
Automotive/Mobile
    4,605       1.8 %     107,641       23.8 %     (103,036 )     -95.7 %
Aviation
    14,277       24.2 %     27,944       32.7 %     (13,667 )     -48.9 %
Total
  $ 57,959       13.3 %   $ 172,732       26.0 %   $ (114,773 )     -66.4 %

Operating income was down 1270 basis points as a percent of revenue when compared to the first quarter of 2008 due to declining revenues and the resulting impact on gross margins and continued growth in research and development expense associated with ongoing development activities.   Operating margins decreased to 27.8%, 1.8%, and 24.2% within our marine, automotive/mobile and aviation segments, respectively, when compared with the first quarter in 2008.   Operating margins increased to 35.6% within our outdoor/fitness segment.  Management expects margins in the automotive/mobile segment to increase sequentially as pricing and volumes increase in the second quarter of 2009.

Other Income (Expense)
 
   
13-weeks ended
   
13-weeks ended
 
   
March 28, 2009
   
March 29, 2008
 
Interest Income
  $ 5,097     $ 8,327  
Foreign Currency Exchange
    (2,438 )     (3,999 )
Other
    (694 )     5,383  
Total
  $ 1,965     $ 9,711  
 

The average interest rate return on cash and investments during the first quarter of 2009 was 1.8% compared to 2.9% during the same quarter of 2008.  The decrease in interest income is attributable to decreasing interest rates.

Foreign currency gains and losses for the Company are primarily tied to movements by the Taiwan Dollar, the Euro, and the British Pound Sterling.   The U.S. Dollar remains the functional currency of Garmin (Europe) Ltd.  The Euro is the functional currency of all other European subsidiaries excluding Garmin Danmark and Garmin Sweden.  As these entities have grown, Euro currency moves generate material gains and losses.   Additionally, Euro-based inter-company transactions in Garmin Ltd. can also generate currency gains and losses.  The Canadian Dollar and Danish Krone, and Swedish Krona are the functional currency of Dynastream Innovations, Inc., Garmin Danmark, and Garmin Sweden respectively; due to these entities’ relative size, currency moves are not expected to have a material impact on the Company’s financial statements.

The majority of the $2.4 million currency loss in the first quarter of 2009 was due to the strengthening of the U.S. Dollar compared to the Euro, the British Pound Sterling, and the Taiwan Dollar.  The relative strength of the Taiwan Dollar and Euro have offsetting impacts due to the use of the Taiwan Dollar for manufacturing costs while the Euro transactions relate to revenue.  During the first quarter of 2009, the U.S. Dollar strengthened 4.3% and 2.3%, respectively, compared to the Euro and the British Pound Sterling, resulting in a loss of $13.6 million.  Offsetting this loss was a gain of $11.1 million due to the U.S. Dollar strengthening 2.1% against the Taiwan Dollar.  The remaining net currency gain of $0.1 million related to other currencies and timing of transactions.

The majority of the $4.0 million currency loss in the first quarter of 2008 was due to the weakening of the U.S. Dollar compared to the Taiwan Dollar.   During the first quarter of fiscal 2008 the Taiwan Dollar exchange rate increased 6.4% in comparison to the USD, resulting in a $43.7 million loss. Offsetting this impact, the Euro has strengthened 7.6% relative to the U.S. Dollar during the first quarter which resulted in a $39.9 million gain. The relative strength of the Taiwan Dollar and Euro have offsetting impacts due to the use of the Taiwan Dollar for manufacturing costs while the Euro transactions relate to revenue. Other net currency gains and the timing of transactions created the remaining loss of $0.2 million.
 
16


Other income of $5.4 million in the first quarter of 2008 was primarily generated from the sale of a portion of our equity interest in Tele Atlas N.V.

Income Tax Provision
 
Our earnings before taxes decreased 67% when compared to the same quarter in 2008, and our income tax expense decreased similarly by $23.3 million, to $11.4 million, for the 13-week period ended March 28, 2009, from $34.7 million for the 13-week period ended March 29, 2008.  The effective tax rate was 19.0% in the first quarter of 2009 and the first quarter of 2008.

Net Income

As a result of the above, net income decreased 67.2% for the 13-week period ended March 28, 2009 to $48.5 million compared to $147.8 million for the 13-week period ended March 29, 2008.
 
17

 
Liquidity and Capital Resources

Net cash generated by operating activities was $299.4 million for the 13-week period ended March 28, 2009 compared to $192.3 million for the 13-week period ended March 29, 2008. We attempt to carry sufficient inventory levels of finished goods and key components so that potential supplier shortages have as minimal an impact as possible on our ability to deliver our finished products. We experienced a $71.8 million year-to-date decrease in net inventories in this 13-week period of 2009.   Accounts receivable decreased $321.2 million, net of bad debts, during the first quarter of 2009 due to collections following the seasonally strong fourth quarter of 2008.

Cash flow used in investing activities during the 13-week period ending March 28, 2009 was $66.0 million.  Cash flow used in investing activities principally related to $13.1 million in capital expenditures primarily related to business operation and maintenance activities, the net purchase of $52.0 million of fixed income securities associated with the investment of our on-hand cash balances, and the purchase of intangible assets for $0.9 million. It is management’s goal to invest the on-hand cash consistent with the Company’s investment policy, which has been approved by the Board of Directors. The investment policy’s primary purpose is to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of maximum safety. The average interest rate return on cash and investments during the first quarter of 2009 was 1.8%

Net cash used in financing activities during the period was $1.7 million resulting from the use of $1.8 million for stock repurchased under our stock repurchase plan, offset by $0.1 million from the issuance of common stock related to our Company stock option plan and stock based compensation tax benefits.

We currently use cash flow from operations to fund our capital expenditures and to support our working capital requirements. We expect that future cash requirements will principally be for capital expenditures, working capital requirements, repurchase of shares, and payment of dividends declared.

We believe that our existing cash balances and cash flow from operations will be sufficient to meet our projected capital expenditures, working capital, repurchase of shares, and other cash requirements at least through the end of fiscal 2009.


Contractual Obligations and Commercial Commitments

Pursuant to certain supply agreements, the Company is contractually committed to make purchases of approximately $37.2 million over the next 5 years.
 
Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.
 
18

 
Item 3.  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 material costs are both significantly influenced by semiconductor market conditions.  Historically, during cyclical economic downturns, we have been able to offset pricing declines for our products through a combination of improved product mix and success in obtaining price reductions in raw material costs.   In the current quarter, we were not able to offset the steep decline in sales with cost savings resulting in a significant decrease in gross and operating margins.

Inflation

We do not believe that inflation has had a material effect on our business, financial condition or results of operations.  If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.  Our inability or failure to do so could adversely affect our business, financial condition and results of operations.

Foreign Currency Exchange Rate Risk

The operation of the Company’s subsidiaries in international markets results in exposure to movements in currency exchange rates. The potential of volatile foreign exchange rate fluctuations in the future could have a significant effect on our results of operations.    In accordance with Statement of Financial Accounting Standards (SFAS) No. 52, Foreign Currency Translation, the financial statements of all Company entities with functional currencies that are not United States dollars (USD) are translated for consolidation purposes into USD, the functional currency of Garmin Ltd. and Garmin International, Inc.    Sales, costs, and expenses are translated at rates prevailing during the reporting periods and at end-of-period rates for all assets and liabilities.   The effect of this translation is recorded in a separate component of stockholders’ equity and have been included in accumulated other comprehensive gain/(loss) in the accompanying consolidated balance sheets.

Foreign currency gains and losses for the Company are primarily tied to movements by the Taiwan Dollar (TD), the Euro, and the British Pound Sterling.   The U.S. Dollar (USD) remains the functional currency of Garmin (Europe) Ltd.  The Euro is the functional currency of all European subsidiaries excluding Garmin Danmark and Garmin Sweden.  As these entities have grown, Euro currency moves generated material gains and losses.   Additionally, Euro-based inter-company transactions in Garmin Ltd. can also generate currency gains and losses.  The Canadian Dollar and Danish Krone, and Swedish Krona are the functional currency of Dynastream Innovations, Inc., Garmin Danmark, and Garmin Sweden respectively; due to these entities’ relative size, currency moves are not expected to have a material impact on the Company’s financial statements.

Interest  Rate Risk

As of March 28, 2009, we are exposed to interest rate risk in connection with our investments in marketable securities.   As interest rates change, the unrealized gains and losses associated with those securities will fluctuate accordingly.    As we have no outstanding long term debt we have no meaningful debt-related interest rate risk.
 
19


Item 4.  Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. As of March 28, 2009, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of March 28, 2009 that our disclosure controls and procedures were effective such that the information relating to the Company, required to be disclosed in our Securities and Exchange Commission ("SEC") reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company's management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There has been no change in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended March 28, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

20


Part II - Other Information
 
Item 1.  Legal Proceedings

Encyclopaedia Britannica, Inc. v. Alpine Electronics of America, Inc., Alpine Electronics, Inc., Denso Corporation, Toyota Motor Sales, U.S.A., Inc., American Honda Motor Co., Inc., and Garmin International, Inc.

On May 16, 2005, Encyclopaedia Britannica, Inc. (“Encyclopaedia Britannica”) filed suit in the United States District Court for the Western District of Texas, Austin Division, against Garmin International, Inc. and five other unrelated companies, alleging infringement of U.S. Patent No. 5,241,671 (“the ’671 patent”). On December 30, 2005, Garmin International filed a Motion for Summary Judgment for Claim Invalidity Based on Indefiniteness.  On September 30, 2008, the court issued a Memorandum Opinion and Order granting Garmin International’s Motion for Summary Judgment for Claim Invalidity Based on Indefiniteness with respect to the ’671 patent. On October 8, 2008, the court issued an Amended Final Judgment ordering that Encyclopaedia Britannica take nothing from its action against Garmin International with respect to the ’671 patent and closed that case.  On November 12, 2008, Encyclopaedia Britannica filed a Notice of Appeal to the Federal Circuit Court of Appeals.  On March 3, 2009, Encyclopaedia Britannica filed a Corrected Brief of Appellant.  Garmin International expects to file its responsive brief on or before May 9, 2009 and believes the Federal Circuit will affirm the district court’s judgment.

On May 23, 2006, Encyclopaedia Britannica filed an amended complaint claiming that Garmin International and the other defendants also infringe U.S. Patent No. 7,051,018 (“the ‘018 patent”), a continuation patent of the ‘671 patent, which issued on May 23, 2006.  On July 25, 2006, Encyclopaedia Britannica filed a new complaint claiming that Garmin International and the other defendants also infringe U.S. Patent No. 7,082,437 (“the ‘437 patent”), a continuation patent of the ‘671 patent, which issued on July 25, 2006.  Encyclopaedia Britannica has asserted the ’018 and ’437 patents against other parties in Encyclopaedia Britannica v. Magellan Navigation, Inc., et al., Case No. 07-CA-787 (LY)(W.D. Tex).  On February 6, 2009, the court entered a scheduling order enabling all defendants in these cases to file a consolidated Joint Motion for Summary Judgment of Invalidity of the ’018 and ’437 patents and stayed all proceedings pending the court’s ruling on the joint motion for summary judgment.  On February 20, 2009, the defendants filed a consolidated Joint Motion for Summary Judgment of Invalidity of the ’018 and ’437 patents and the parties await a hearing and/or the court’s ruling on this motion.  Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin International, Inc. believes that the claims are without merit and intends to vigorously defend these actions.

SP Technologies, LLC v. Garmin Ltd., Garmin International, Inc., TomTom, Inc., and Magellan Navigation,Inc.

On June 5, 2008, SP Technologies, LLC filed suit in the United States District Court for the Northern District of Illinois against Garmin Ltd. and Garmin International, Inc. alleging infringement of U.S. Patent No. 6,784,873 (“the ’873 patent”). On July 7, 2008, SP Technologies, LLC filed an amended complaint removing all claims against Garmin Ltd. and alleging infringement of the ’873 patent against additional defendants TomTom, Inc. and Magellan Navigation, Inc. Garmin believes that it should not be found liable for infringement of the ’873 patent and additionally that the ’873 patent is invalid. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin International, Inc. believes that the claims are without merit and intends to vigorously defend this lawsuit.

On August 18, 2008, Garmin filed its answer to the amended complaint along with a motion for dismissal of SP Technologies, LLC’s claims of willful and inducement infringement of the ’873 patent. On October 16, 2008, the court granted Garmin’s motion for partial dismissal, striking the willful and inducement infringement allegations from the amended complaint.

On January 7, 2009, Garmin filed an Amended Answer and Counterclaims asserting the ’873 patent is not infringed, is invalid, and that the plaintiff committed inequitable conduct resulting in unenforceability of the ’873 patent. On February 2, 2009, codefendant TomTom, Inc. filed a Motion for Summary Judgment of Unenforceability of the ’873 Patent Due to Inequitable Conduct.  On April 10, 2009, the Court held a claim construction hearing and the parties await the Court’s ruling on claim construction and summary judgment.
 
21



Scott C. Harris and Memory Control Enterprise, 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 District Court for the Northern District of Illinois against Garmin International, Inc., along with Dash Navigation, Inc., Lowrance Electronics, Inc., Magellan Navigation, Inc., Mio Technology USA, Navigon Inc., Netropa Corporation, and Sony Electronics, Inc. The complaint against Garmin International, Inc. alleges infringement of U.S. Patent No. 6,892,136 (“the ’136 patent”). Garmin believes that it should not be found liable of infringement of the ’136 patent and additionally that the ’136 patent is invalid. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin International believes that the claims are without merit and intends to vigorously defend this lawsuit.

From time to time Garmin is involved in other legal actions arising in the ordinary course of our business.  We believe that the ultimate outcome of these actions will not have a material adverse effect on our business, financial condition and results of operations.

Item 1A.   Risk Factors

There are many risks and uncertainties that can affect our future business, financial performance or share price.  In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 27, 2008.  There have been no material changes during the 13-week period ended March 28, 2009 in the risks described in our Annual Report on Form 10-K.  These risks, however, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
 
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

Items (a) and (b) are not applicable.

(c) Issuer Purchases of Equity Securities

The Board of Directors approved a share repurchase program on October 22, 2008, authorizing the Company to purchase up to $300,000 of its common shares as market and business conditions warrant.   The share repurchase authorization expires on December 31, 2009.    The following table lists the Company’s share purchases during the first quarter of fiscal 2009:
 
               
Total Number of Shares
   
Approx. Dollar Value of
 
               
Purchased as Part of
   
Shares That May Yet
 
   
Total # of
   
Average Price
   
Publicly Announced
   
Be Purchased Under
 
Period
 
Shares Purchased
   
Paid Per Share
   
Plans or Programs
   
the Plans or Programs
 
                         
13-weeks ended
                       
March 28, 2009
    117,600     $ 15.71       117,600     $ 256,470  
                                 
Total
    117,600     $ 15.71       117,600     $ 256,470  
 
22


Item 3.   Defaults Upon Senior Securities

None

Item 4.   Submission of Matters to a Vote of Security Holders

None .
 
Item 5.   Other Information

Not applicable
 
23

 
Item 6.   Exhibits
 
 
Exhibit 31.1
Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

 
Exhibit 31.2
Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

 
Exhibit 32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 
Exhibit 32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
24

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
  GARMIN LTD.  
       
 
By:
/s/ Kevin Rauckman  
    Kevin Rauckman  
   
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
 
   
 
 
 
Dated:   May 6, 2009
 
25

 
INDEX TO EXHIBITS
 
Exhibit No.      Description
   
   
Exhibit 31.1
Certification of Chief Executive Officer pursuant to Exchange Act
 
Rule 13a-14(a) or 15d-14(a).

Exhibit 31.2
Certification of Chief Financial Officer pursuant to Exchange Act
 
Rule 13a-14(a) or 15d-14(a).

Exhibit 32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

Exhibit 32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C.
 
Section 1350, as adopted pursuant to Section 906 of the
 
Sarbanes-Oxley Act of 2002
 
26