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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2024

GARMIN LTD.

(Exact name of registrant as specified in its charter)

 

Switzerland

 

001-41118

 

98-0229227

(State or other jurisdiction
of incorporation)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

Mühlentalstrasse 2

8200 Schaffhausen

Switzerland

(Address of principal executive offices)

Registrant’s telephone number, including area code: +41 52 630 1600

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Registered Shares, $0.10 Per Share Par Value

 

GRMN

 

New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


 

Item 2.02. Results of Operations and Financial Condition

On October 30, 2024, Garmin Ltd. (“the Company”) issued a press release (the “Press Release”) announcing its financial results for the fiscal third quarter ended September 28, 2024. A copy of the Press Release is attached as Exhibit 99.1.

The information in Item 2.02 and Exhibit 99.1 to this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of Garmin Ltd. under the Securities Act of 1933, as amended, or the Exchange Act made after the date hereof, the information contained in Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits. The following exhibits are furnished herewith.

 

Exhibit No.

Description

99.1

Press Release dated October 30, 2024

104

The cover page from this Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101)

 

1


 

SIGNATURE

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

 

 

GARMIN LTD.

 

 

October 30, 2024

/s/ Joshua H. Maxfield

 

Joshua H. Maxfield

 

Vice President and General Counsel

 

2


EX-99.1 2 grmn-ex99_1.htm EX-99.1 EX-99.1

 

img45548057_0.jpg

 

EXHIBIT 99.1

 

 

Garmin announces third quarter 2024 results

Company reports record third quarter consolidated revenue and operating income, and raises full year guidance

 

img45548057_1.jpg

Schaffhausen, Switzerland / October 30, 2024 / PR Newswire – Garmin® Ltd. (NYSE: GRMN), today announced results for the third quarter ended September 28, 2024.

 

Highlights for third quarter 2024 include:

 

Consolidated revenue of $1.59 billion, a 24% increase compared to the prior year quarter
Gross and operating margins expanded to 60.0% and 27.6%, respectively
Operating income of $437 million, a 62% increase compared to the prior year quarter
GAAP EPS of $2.07 and pro forma EPS(1) of $1.99, representing 41% growth in pro forma EPS over the prior year quarter
Launched the fēnix® 8 series and the EnduroTM 3, expanding our lineup of outdoor adventure watches
Named 2024 Manufacturer of the Year by the National Marine Electronics Association for the 10th consecutive year, and received six Product of Excellence awards, for a total of 63 over the last decade
Named the #1 Most Innovative Marine Company for the second consecutive year by Soundings Trade Only, a leading trade publication for the recreational boating industry
Announced the strategic acquisition of Lumishore, a leader in marine LED lighting
Co-founders, Dr. Min Kao and the late Gary Burrell, were enshrined in the National Aviation Hall of Fame

 

(In thousands, except per share information)

13-Weeks Ended

39-Weeks Ended

September 28,

September 30,

YoY

September 28,

September 30,

YoY

2024

2023

Change

2024

2023

Change

Net sales

$

1,586,022

$

1,277,531

24%

$

4,474,342

$

3,745,751

19%

      Fitness

463,887

352,976

31%

1,235,182

932,561

32%

      Outdoor

526,551

433,997

21%

1,332,617

1,210,773

10%

      Aviation

204,631

198,160

3%

639,739

629,195

2%

      Marine

222,244

182,248

22%

821,933

677,026

21%

      Auto OEM

168,709

110,150

53%

444,871

296,196

50%

Gross margin %

60.0

%

57.0

%

58.5

%

57.2

%

Operating income %

27.6

%

21.2

%

24.1

%

20.1

%

GAAP diluted EPS

$

2.07

$

1.34

54%

$

5.06

$

3.90

30%

Pro forma diluted EPS(1)

$

1.99

$

1.41

41%

$

4.99

$

3.88

29%

(1) See attached Non-GAAP Financial Information for discussion and reconciliation of non-GAAP financial measures, including pro forma diluted EPS

 

 


 

Executive Overview from Cliff Pemble, President and Chief Executive Officer:

“We delivered another quarter of impressive financial results as our highly differentiated and innovative products resonate with customers, and we successfully leveraged growth opportunities across market segments and geographies. We are raising our 2024 outlook based on the results we have achieved so far and the momentum we are experiencing as we enter the important holiday selling season.” - Cliff Pemble, President and Chief Executive Officer of Garmin Ltd.

 

Fitness:

Revenue from the fitness segment increased 31% in the third quarter with growth across all categories led by strong demand for wearables. Gross and operating margins were 61% and 32%, respectively, resulting in $148 million of operating income. During the quarter, we hosted our annual Garmin Health Summit to recognize innovative digital health solutions utilizing Garmin products, and to celebrate the 10th anniversary of Garmin Health. Also, during the quarter we announced updates to Garmin Coach, adding training plans for cyclists in addition to the existing training plans for runners, making it easier to prepare for an event, pursue a personal milestone or improve overall fitness.

 

Outdoor:

Revenue from the outdoor segment increased 21% in the third quarter primarily due to growth in adventure watches. Gross and operating margins were 68% and 40%, respectively, resulting in $209 million of operating income. During the quarter, we launched both the highly anticipated fēnix 8 series, adding brilliant AMOLED displays, cutting edge features, a built-in speaker, microphone, and an LED flashlight, and the Enduro 3, a lightweight ultraperformance GPS smartwatch purpose-built for ultra-endurance athletes with up to 320 hours of battery life in GPS mode with solar charging. We also launched the inReach® Messenger Plus, our first satellite communicator with photo and voice messaging in addition to two-way texting, location sharing and SOS capabilities, expanding our customers’ ability to stay in touch beyond cell service.

 

Aviation:

Revenue from the aviation segment increased 3% in the third quarter with growth driven by aftermarket product categories. Gross and operating margins were 75% and 22%, respectively, resulting in $44 million of operating income. During the quarter, we announced Runway Occupancy Awareness, which uses ADS-B information to help reduce the risk of runway incursions and provide added confidence to pilots navigating busy and complex airports. Garmin is the first to bring this new safety feature to market. We also recently unveiled our new G3000® PRIME, which redefines the integrated flight deck experience with sleek, intuitive, all-touchscreen displays and a highly flexible open architecture system that seamlessly adapts to serve a broad and dynamic market.

 

Marine:

Revenue from the marine segment increased 22% in the third quarter primarily driven by the acquisition of JL Audio®. Gross and operating margins were 55% and 17%, respectively, resulting in $38 million of operating income. During the quarter, we announced several new products to enhance our customers’ time on the water, including Fusion ApolloTM marine speaker and subwoofer series, the GCTM 245/55 marine cameras, and the GPSMAP® 9500 black box system. We recently announced the acquisition of Lumishore, a leader in marine LED lighting as we continue to focus on providing seamless integration throughout the boat.

Auto OEM:

Revenue from the auto OEM segment increased 53% during the third quarter primarily driven by growth in domain controllers. Gross margin was 20% and the operating loss narrowed to $1 million as efficiencies improved with higher sales volumes. During the quarter, we successfully launched the Garmin-designed domain controllers across all remaining BMW Group car lines.

 

 


 

Additional Financial Information:

 

Total operating expenses in the third quarter were $514 million, a 12% increase over the prior year. Both research and development and selling, general and administrative expenses increased 12% driven primarily by personnel related costs.

 

The effective tax rate in the third quarter was 17.9% compared to the effective tax rate of 8.0% and the pro forma effective tax rate(1) of 7.2% in the prior year quarter. The increase in the current quarter effective tax rate is primarily due to the increase in the combined federal and cantonal Switzerland statutory tax rate in response to global minimum tax requirements.

 

In the third quarter of 2024, we generated operating cash flows of $258 million and free cash flow(1) of $219 million. We paid a quarterly dividend of approximately $144 million and repurchased $20 million of the Company’s shares within the quarter, leaving approximately $270 million remaining as of September 28, 2024 in the share repurchase program authorized through December 2026. We ended the quarter with cash and marketable securities of approximately $3.5 billion.

(1)
See attached Non-GAAP Financial Information for discussion and reconciliation of non-GAAP financial measures, including pro forma effective tax rate and free cash flow.

 

2024 Fiscal Year Guidance:

Based on our performance in the first three quarters of 2024, we are adjusting our full year guidance. We now anticipate revenue of approximately $6.12 billion and pro forma EPS of $6.85 based on gross margin of 58.5%, operating margin of 24.0% and a full year effective tax rate of 16.5% (see attached discussion on Forward-looking Financial Measures).

 

Dividend Recommendation:

The board of directors has established December 27, 2024, as the payment date for the next dividend installment of $0.75 per share with a record date of December 13, 2024. At the 2024 annual shareholders’ meeting, Garmin shareholders, in accordance with Swiss corporate law, approved a cash dividend in the total amount of $3.00 per share, payable in four equal installments on dates to be determined by the board in its discretion. The first and second payments were made on June 28, 2024 and September 27, 2024. The board currently anticipates the scheduling of the remaining quarterly dividend installments as follows:

 

Dividend Date

Record Date

$s per share

March 28, 2025

March 14, 2025

$0.75

 

 


 

Webcast Information/Forward-Looking Statements:

 

The information for Garmin Ltd.’s earnings call is as follows:

 

When:

 

Wednesday, October 30, 2024 at 10:30 a.m. Eastern

Where:

 

Join a live stream of the call at the following link

 

 

https://www.garmin.com/en-US/investors/events/

 

An archive of the live webcast will be available until October 29, 2025 on the Garmin website at www.garmin.com. To access the replay, click on the Investors link and click over to the Events Calendar page.

 

This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “anticipates,” “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with similar meanings. Any statements regarding the Company’s expected fiscal 2024 GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the Company’s expected segment revenue growth rates, consolidated revenue, gross margins, operating margins, potential future acquisitions, share repurchase programs, currency movements, expenses, pricing, new product launches, market reach, statements relating to possible future dividends, and the Company’s plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors and uncertainties affecting Garmin, including, but not limited to, the risk factors that are described in the Annual Report on Form 10-K for the year ended December 30, 2023 filed by Garmin with the Securities and Exchange Commission (Commission file number 001-41118). A copy of Garmin’s 2023 Form 10-K can be downloaded from https://www.garmin.com/en-US/investors/sec/. All information provided in this release and in the attachments is as of September 28, 2024. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

 

This release and the attachments contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the Company’s use of these measures are included in the attachments.

 

Garmin, the Garmin logo, the Garmin delta, fēnix, G3000, GPSMAP, inReach, and JL Audio are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S. Enduro, Fusion Apollo, and GC are trademarks of Garmin Ltd. or its subsidiaries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved.

 

 

 

Investor Relations Contact:

 

Media Relations Contact:

Teri Seck

 

Krista Klaus

913/397-8200

 

913/397-8200

investor.relations@garmin.com

 

media.relations@garmin.com

 

 


 

Change in Operating Expense Presentation

Certain prior period information presented here has been recast to conform to the current period presentation. In the first quarter of 2024, the Company changed the presentation of operating expense to include advertising expense within selling, general, and administrative expenses on the Company’s condensed consolidated statements of income, which management believes to be a more meaningful presentation. This change in presentation had no effect on the Company’s consolidated operating or net income.

 

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(In thousands, except per share information)

13-Weeks Ended

39-Weeks Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Net sales

$

1,586,022

$

1,277,531

$

4,474,342

$

3,745,751

Cost of goods sold

634,423

548,962

1,857,712

1,604,945

Gross profit

951,599

728,569

2,616,630

2,140,806

Research and development expense

249,162

221,572

734,848

667,451

Selling, general and administrative expenses

264,962

236,628

803,869

721,649

Total operating expense

514,124

458,200

1,538,717

1,389,100

Operating income

437,475

270,369

1,077,913

751,706

Other income (expense):

Interest income

28,830

19,803

83,143

54,461

Foreign currency gains (losses)

18,131

(11,539

)

15,584

6,946

Other income

1,814

938

2,623

4,206

Total other income (expense)

48,775

9,202

101,350

65,613

Income before income taxes

486,250

279,571

1,179,263

817,319

Income tax provision

87,139

22,328

203,560

69,810

Net income

$

399,111

$

257,243

$

975,703

$

747,509

Net income per share:

Basic

$

2.08

$

1.34

$

5.08

$

3.91

Diluted

$

2.07

$

1.34

$

5.06

$

3.90

Weighted average common shares outstanding:

Basic

192,201

191,435

192,055

191,409

Diluted

193,171

191,868

192,940

191,772

 

 


 

Garmin Ltd. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

September 28,

2024

December 30, 2023

Assets

Current assets:

Cash and cash equivalents

$

2,009,361

$

1,693,452

Marketable securities

414,701

274,618

Accounts receivable, net

922,034

815,243

Inventories

1,505,536

1,345,955

Deferred costs

23,385

16,316

Prepaid expenses and other current assets

334,488

318,556

Total current assets

5,209,505

4,464,140

Property and equipment, net

1,220,113

1,224,097

Operating lease right-of-use assets

137,665

143,724

Noncurrent marketable securities

1,106,532

1,125,191

Deferred income tax assets

787,849

754,635

Noncurrent deferred costs

7,994

11,057

Goodwill

611,884

608,474

Other intangible assets, net

168,230

186,601

Other noncurrent assets

97,960

85,650

Total assets

$

9,347,732

$

8,603,569

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

374,025

$

253,790

Salaries and benefits payable

218,941

190,014

Accrued warranty costs

57,983

55,738

Accrued sales program costs

75,802

98,610

Other accrued expenses

222,925

245,874

Deferred revenue

113,049

101,189

Income taxes payable

227,735

225,475

Dividend payable

288,204

139,997

Total current liabilities

1,578,664

1,310,687

Deferred income tax liabilities

104,996

114,682

Noncurrent income taxes payable

16,864

16,521

Noncurrent deferred revenue

30,227

36,148

Noncurrent operating lease liabilities

109,832

113,035

Other noncurrent liabilities

602

436

Stockholders’ equity:

Common shares (194,901 and 195,880 shares authorized and issued;

    192,136 and 191,777 shares outstanding)

19,490

19,588

Additional paid-in capital

2,218,170

2,125,467

Treasury shares (2,765 and 4,103 shares)

(243,994

)

(330,909

)

Retained earnings

5,563,576

5,263,528

Accumulated other comprehensive income (loss)

(50,695

)

(65,614

)

Total stockholders’ equity

7,506,547

7,012,060

Total liabilities and stockholders’ equity

$

9,347,732

$

8,603,569

 

 


 

Garmin Ltd. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

39-Weeks Ended

September 28, 2024

September 30, 2023

Operating Activities:

Net income

$

975,703

$

747,509

Adjustments to reconcile net income to net cash provided by

   operating activities:

Depreciation

102,343

98,483

Amortization

30,849

33,751

Gain on sale or disposal of property and equipment

(48

)

(50

)

Unrealized foreign currency (gains) losses

(25,486

)

9,927

Deferred income taxes

(53,966

)

(90,214

)

Stock compensation expense

101,039

66,214

Realized loss on marketable securities

29

56

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable, net of allowance for doubtful accounts

(103,567

)

(54,756

)

Inventories

(163,865

)

111,459

Other current and noncurrent assets

(47,413

)

28,288

Accounts payable

124,315

55,340

Other current and noncurrent liabilities

(6,987

)

430

Deferred revenue

5,885

7,063

Deferred costs

(3,987

)

(1,152

)

Income taxes

13,737

(102,024

)

Net cash provided by operating activities

948,581

910,324

Investing activities:

Purchases of property and equipment

(108,869

)

(144,876

)

Purchase of marketable securities

(363,783

)

(116,039

)

Redemption of marketable securities

277,334

145,094

Net cash from (payments for) acquisitions

5,011

(150,853

)

Other investing activities, net

(458

)

(1,018

)

Net cash used in investing activities

(190,765

)

(267,692

)

Financing activities:

Dividends

(428,373

)

(419,166

)

Proceeds from issuance of treasury shares related to equity awards

24,530

21,946

Purchase of treasury shares related to equity awards

(16,313

)

(9,397

)

Purchase of treasury shares under share repurchase plan

(29,278

)

(79,533

)

Net cash used in financing activities

(449,434

)

(486,150

)

Effect of exchange rate changes on cash and cash equivalents

7,536

(12,854

)

Net increase in cash, cash equivalents, and restricted cash

315,918

143,628

Cash, cash equivalents, and restricted cash at beginning of period

1,694,156

1,279,912

Cash, cash equivalents, and restricted cash at end of period

$

2,010,074

$

1,423,540

 

 


 

Garmin Ltd. and Subsidiaries

Net Sales, Gross Profit and Operating Income by Segment (Unaudited)

(In thousands)

 

Fitness

Outdoor

Aviation

Marine

Auto OEM

Total

13-Weeks Ended September 28, 2024

Net sales

$

463,887

$

526,551

$

204,631

$

222,244

$

168,709

$

1,586,022

Gross profit

283,325

358,693

154,138

122,433

33,010

951,599

Operating income (loss)

147,768

208,866

44,278

37,839

(1,276

)

437,475

13-Weeks Ended September 30, 2023

Net sales

$

352,976

$

433,997

$

198,160

$

182,248

$

110,150

$

1,277,531

Gross profit

190,685

270,774

148,364

95,186

23,560

728,569

Operating income (loss)

74,614

136,401

49,269

23,850

(13,765

)

270,369

39-Weeks Ended September 28, 2024

Net sales

$

1,235,182

$

1,332,617

$

639,739

$

821,933

$

444,871

$

4,474,342

Gross profit

723,375

885,646

478,131

449,472

80,006

2,616,630

Operating income (loss)

323,511

451,408

146,899

185,422

(29,327

)

1,077,913

39-Weeks Ended September 30, 2023

Net sales

$

932,561

$

1,210,773

$

629,195

$

677,026

$

296,196

$

3,745,751

Gross profit

484,759

755,800

463,774

365,162

71,311

2,140,806

Operating income (loss)

139,651

351,399

169,730

142,135

(51,209

)

751,706

 

 

 

Garmin Ltd. and Subsidiaries

Net Sales by Geography (Unaudited)

(In thousands)

13-Weeks Ended

39-Weeks Ended

September 28,

September 30,

YoY

September 28,

September 30,

YoY

2024

2023

Change

2024

2023

Change

Net sales

$

1,586,022

$

1,277,531

24%

$

4,474,342

$

3,745,751

19%

Americas

724,572

628,157

15%

2,181,266

1,881,710

16%

EMEA

612,658

439,123

40%

1,618,058

1,252,526

29%

APAC

248,792

210,251

18%

675,018

611,515

10%

EMEA - Europe, Middle East and Africa; APAC - Asia Pacific and Australian Continent

 

 


 

Non-GAAP Financial Information

 

To supplement our financial results presented in accordance with GAAP, this release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: pro forma effective tax rate, pro forma net income (earnings) per share and free cash flow. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies, limiting the usefulness of the measures for comparison with other companies. Management believes providing investors with an operating view consistent with how it manages the Company provides enhanced transparency into the operating results of the Company, as described in more detail by category below.

 

The tables below provide reconciliations between the GAAP and non-GAAP measures.

 

Pro forma effective tax rate

 

The Company’s income tax expense is periodically impacted by discrete tax items that are not reflective of income tax expense incurred as a result of current period earnings. Therefore, management believes the effective tax rate and income tax provision before the effect of certain discrete tax items are important measures to permit investors' consistent comparison between periods. In the first three quarters of 2024 there were no such discrete tax items identified.

 

(In thousands)

13-Weeks Ended

39-Weeks Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

$

ETR(1)

$

ETR(1)

$

ETR(1)

$

ETR(1)

GAAP income tax provision

$

87,139

17.9

%

$

22,328

8.0

%

$

203,560

17.3

%

$

69,810

8.5

%

Pro forma discrete tax item:

Tax effect of state rate change(2)

(2,269

)

(2,269

)

Pro forma income tax provision

$

87,139

17.9

%

$

20,059

7.2

%

$

203,560

17.3

%

$

67,541

8.3

%

(1) Effective tax rate is calculated by taking the income tax provision divided by income before taxes, as presented on the face of the Condensed Consolidated Statements of Income.

(2) In third quarter 2023, the Company recognized $2.3 million of tax expense due to the revaluation of deferred tax assets associated with the change in corporate income tax rate for the state of Kansas. The impact of the revaluation of these deferred tax assets was not reflective of income tax expense incurred as a result of current period earnings.

 

 


 

Pro forma net income (earnings) per share

 

Management believes net income (earnings) per share before the impact of foreign currency gains or losses and certain discrete income tax items, as discussed above, is an important measure to permit a consistent comparison of the Company’s performance between periods.

 

(In thousands, except per share information)

13-Weeks Ended

39-Weeks Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

GAAP net income

$

399,111

$

257,243

$

975,703

$

747,509

Foreign currency gains / losses(1)

(18,131

)

11,539

(15,584

)

(6,946

)

Tax effect of foreign currency gains / losses(2)

3,249

(828

)

2,690

574

Pro forma discrete tax item(3)

2,269

2,269

Pro forma net income

$

384,229

$

270,223

$

962,809

$

743,406

GAAP net income per share:

Basic

$

2.08

$

1.34

$

5.08

$

3.91

Diluted

$

2.07

$

1.34

$

5.06

$

3.90

Pro forma net income per share:

Basic

$

2.00

$

1.41

$

5.01

$

3.88

Diluted

$

1.99

$

1.41

$

4.99

$

3.88

Weighted average common shares outstanding:

Basic

192,201

191,435

192,055

191,409

Diluted

193,171

191,868

192,940

191,772

(1) Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S. Dollar and the related exchange rate impact on the significant cash, receivables, and payables held in a currency other than the functional currency at a given legal entity. However, there is minimal cash impact from such foreign currency gains and losses.

(2) The tax effect of foreign currency gains was calculated using the effective tax rate of 17.9% and 17.3% for the 13-weeks and 39-weeks ended September 28, 2024 and 7.2% and 8.3% for the 13-weeks and 39-weeks ended September 30, 2023.

 

 


 

Free cash flow

 

Management believes free cash flow is an important liquidity measure because it represents the amount of cash provided by operations that is available for investing and defines it as operating cash flows less capital expenditures for property and equipment. Management believes excluding purchases of property and equipment provides a better understanding of the underlying trends in the Company’s operations and allows more accurate comparisons of the Company’s results between periods. This metric may also be useful to investors but should not be considered in isolation as it is not a measure of cash flow available for discretionary expenditures. The most comparable GAAP measure is net cash provided by operating activities.

 

(In thousands)

13-Weeks Ended

39-Weeks Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Net cash provided by operating activities

$

257,955

$

357,412

$

948,581

$

910,324

Less: purchases of property and equipment

(38,544

)

(45,530

)

(108,869

)

(144,876

)

Free Cash Flow

$

219,411

$

311,882

$

839,712

$

765,448

 

Forward-looking Financial Measures

 

The forward-looking financial measures in our 2024 guidance provided above do not consider the potential future net effect of foreign currency exchange gains and losses, certain discrete tax items and any other impacts that may be identified as pro forma adjustments in calculating the non-GAAP measures described above.

 

The estimated impact of foreign currency gains and losses cannot be reasonably estimated on a forward-looking basis due to the high variability and low visibility with respect to non-operating foreign currency exchange gains and losses and the related tax effects of such gains and losses. The impact on diluted net income per share of foreign currency gains and losses, net of tax effects, was $0.07 per share for the 39-weeks ended September 28, 2024.

 

At this time, management is unable to determine whether or not significant discrete tax items will occur in fiscal 2024, estimate the impact of any such items, or anticipate the impact of any other events that may be considered in the calculation of non-GAAP financial measures.

 

 

 

 

 

 

 

 

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