Garmin (GRMN) 17 Feb 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Garmin Limited Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be question-and-answer session. [Operator Instructions] I would now like to hand the conference to your speaker today, Teri Seck, Manager of Investor Relations. ma’am. ahead, go Please

to outlook Treasurer. call are Boessen, I Chief best date. a Executive based the impact estimate as Financial over Any Garmin’s would in and XXXX and shares, welcome call This this filed the the on that actual regarding significant statements and revenues, factors our Cliff XX-K earnings statements about Cliff Limited Chief concerning and available archive website. COVID-XX Information earnings future the of available press objectives Garmin We Internet our could on Commission. and Limited’s Form our statements. Officer; is and and available Garmin. the forward-looking may www.garmin.com/doc. this and on with like financial is operating its risk behalf COVID-XX business. are on Pemble. uncertainty transcript Presenting at affecting occur, on the to factors demand today’s plans projections Doug our forward-looking Officer statement to results means could as time will position, about fourth includes release An these at The regarding are and particular, slides quarter call. call not these of information the other that related Pemble, earnings events Relations like earnings, margins, any would morning. results and and there future and site time, materially business future product contained you Exchange for margins, differ duration circumstances the webcast In at of company’s Garmin is to turn gross and of and pandemic. results change of of in Garmin earnings Investor and the the related Good This Please forward-looking Limited dividends, At Securities products be note result President risk also market any introductions, discussed the impact morning

Thank you, Teri, and good everyone. morning,

margin in driven our today, As year. billion Gross double-digit growth reported final growth by $X.X Revenue momentum quarter Outdoor the strong XX%, increased the and year. $X.XX Marine margin XX% exceeding in earlier of income and Fitness, segments. our accelerated to to improved XX.X%. increased XX% $XXX was to increasing and Operating EPS also forma EPS GAAP the million $X.XX prior was pro over operating XX.X%. expanded

every pandemic juggling course, no were very learning of of as we challenges unprecedented am personal affecting and new collaborate and I such in created The challenges remotely, back, while proud company, Garmin what of employees, burden of COVID-XX their these Looking in work was the lives. challenges accomplished XXXX. to Many exception.

with in very created with gave lifestyles and Fitness health, to business meet demands. changing us opportunities many We courage opportunities our challenges faced were outstanding active rapidly The and flexibility throughout employees year. the these integrated well-positioned our new vertically determination to as strong in these a product seize and reflected as model resilient were lineup performance Our and pandemic also interest surged.

annual of the an was year. an financial and per upcoming of in XX% Fitness at Considering results, approve which business EPS XX% with increased the nearly to Doug year and in five we few crisis, respectively, share, record Garmin Operating prior margin revenue maintained for strong results income and over a representing margin past our of fueled over segment, GAAP was strong $X.XX, a year. This meeting, as products segments. were a amount. and over introduce current greater of this shareholders record dividend throughout ask a and On growth a from these our margins growth. year. increase Gross billion, products EPS the advanced new achievements XX% the outlook income highlight of resulting on over us But, fifth for will XX% allowed wearables R&D, and revenue $X.XX the increase Gross XX% XX.X% achievement. for innovative annual operating year resulted consolidated each minutes. many discuss will an a operating During to new our our increased of forma focus the to pro growth. Starting and our is dividend to billion, cycling another consecutive our which in basis, which annual I’d of $X the increased XX.X%. like XX% to some XX%, $X.X demand is in detail the $X.XX we XX% first, prior operating

During Cycling the products, wearables new such Venu Sq, the innovative the year, of Edge Computers. XXX we and Forerunner next-generation as the launched and cycling

to forward, Looking offer Firstbeat to and unique Health we products Fitness capitalize acquisition the features. recent We are Fitness. plan leverage Health our broader and to on trends well-positioned of with in

on addition, we Tacx our capitalize lineup to In intend of strong trends with cycling in indoor products. the

Gross in XX% XX%, anticipate respectively, increase operating growth income resulting a the XXXX. demand margins in driven the segment, these primarily In in and and we from XX% mind, Outdoor strong XX%. revenue things increased by revenue operating approximately With will were for adventure at Fitness XX%, segment watches.

Fenix added and in market. ourselves solar smartwatch range broad Instinct highly the we technology and further charging our power technology low During of differentiating to competitive extending a models and year, lead the

activity We potential enjoyment of grow in We will remote two-way more continue convenience leverage Looking appreciate people inReach and Outdoor to of products trends lifesaving and opportunity compelling that forward, communication. this to expect as the plan maximize the by offering believe we to broader adventure. Outdoor continue. that the

critical growing improve of service expand acquisition services, a response GEOS, and and to incident customers. us Our for of of emergency recent provider its inReach our base levels scale monitoring allows

in will anticipate in we things XX% mind, these Outdoor from segment revenue approximately With the increase XXXX.

of XX% categories decreased segment, the were XX% to market. lower margins due and XX%, ADS-B product operating OEM Gross from and decline the revenue the at respectively. Looking expected revenue Aviation next and

owner-flown While aircraft smaller segment, headwinds market, signs OEM especially in created particularly some the the in aircraft. in we pandemic positive the see

of In addition, from latest the of award as safety the the adjusting aftermarket a Autoland new technologies. for greatest Science. signs embrace top aviation, ADS-B, and International XXXX’s being when game as there in changing general Autoland are was recognized innovations one technology News. for aircraft cockpit is Popular also Aviation won encouraging owners by named flight recently, impact

Autoland equipped general categories. achieved and during aircraft on grow XXX and the to now is year, day. this models, approximately aircraft Autoland stabilizing we are Cirrus Vision segment both XXX. expect contributions number the believe including MXXX grow three the the Over During aviation Daher and in continues TBM Piper the Jet, certification with the market OEM We every aftermarket X%, that and from XXXX of to service

quarter against We favorable. growth the followed strong from numbers residual we much the expect revenue as by compare decline from ADS-B last year-over-year this first as in more segment to year, become comparisons

in are safety-enhancing such to aircraft growth on will Autoland as We we continue models additional certifying invest focused and technologies future opportunities. in

results, rediscover XX%. margins product in for created for growth demand increased in strong the segment with Moving XX% Revenue an operating pandemic of operating and categories, and delivered on to multiple boating to respectively, Marine, another year growth resulting XX%, as fishing. chartplotters. Gross people an income by opportunity were of led and the a impressive XX%,

to be recreational the by the Year Year Companies industry. continue XX recognized Independent Only, achievement the National the Trade Electronics Association, Supplier a Manufacturer one of were We Marine Most industry. Marine boating named Incorporated, is in and We innovation Boat Innovative as Marine by Builders, and for the of and for the recently, of Top recognized BXB news we provider were by which information

by will in builders trends features strong. already XXXX these will sold with partners Looking models out and another of segment in a our year Marine approximately offering forward, are boat technologies. mind, of increase XX% preparing disruptive revenue growth. we interest boating on anticipate have XXXX. strong capitalize products Many anticipate and from to innovative that and in for of the this compelling retail fishing remain lineup We With new we their plan

I Auto are providing highlight the to that to finally disclosures expanded want segment. Moving segment, for the now we

Auto, believe financial PND the and will for focused expanded and We of includes level segments is segment, of hardware and Specifically, OEM the information the we which profit which within help revenue, on vehicle segment, Consumer products, disclosing of mix software each separate specialty are manufacturers. disclosures for the and investment profile operating these the investors solutions segment. better the understand two profit

OEM Auto the Auto recorded Revenue products of segment. year-end looking as offset XX% partially an in from driven decreased investments in Gross by at $XX and margin loss specialty by Now was PNDs million programs. decline new XX% OEM growth and was for in revenue results we operating the the programs.

over business few. OEM years. on inflection reached infotainment new such several navigation point Toyota, the top an various few programs we successful and wins, Auto been recent Prior name the just ramp-up OEMs Peugeot, to a Honda, Daimler with and most Our next software, we to as as tier has have programs

developing hardware, all X full and the in build where development production expands which system the role we Tier print the integration. Van next-generation complex BMW of including our system a we Also, production on we are the operating recently for encompass currently are to supplier. a Vito supplier, with We design, for system the program lead to aspects and as infotainment are began current Daimler program, BMW

prior this on to future the Auto are made supplier significant supplier role not testament Tier the the all require programs to lead programs a in into costs R&D X as that revenue a Moving These a progress have and we reimbursed is customer. investment by realizing to industry.

approximately With consumer total grow products these specialty Auto new driven expect growth mind, programs. and XXXX, in OEM to by in in things a revenue we X%%

additional expected the the invest we launch expect future development also late to operating XXXX. OEM We of in programs from segment losses in as

in XXXX anticipated So, one facing what very accomplished no The ago. are segment. about for we every year summary, could we will segments. we mind, the the growth approximately this year anticipate and XXXX, in in am revenue that anticipate one $X.X excited of have all of challenges business proud be look in and we positive billion, XX% increase over indicators just XXXX opportunities in I while prior With an

the XX.X%. We approximately be at and approximately margin XX.X% gross expect operating to margin

remarks. tax forma be earnings pro XX.X%, That pro share concludes $X.XX. per effective my a expected of are to Assuming approximately forma rate

Doug? us walk results. through details on financial will our additional Doug, Next,

Gross Operating million, $XXX was XXX-basis-point percentage XX% year-over-year. XX.X%, year. was XX was Thanks, XX.X%, Cliff. decrease margin flow We expense the taxes. quarter balance sales Operating XX% Operating from increase. everyone. cash to year reviewing increase of statement revenue the a prior fourth prior Good of on our as was $X.X I’d income for representing decrease. a XX.X%, and from financial the begin basis the results, full increase posted comments year. point move quarter, sheet, morning, XXX-basis-point margin fourth and by billion

GAAP Our from XX% forma pro forma year was the prior $X.XX, increase EPS EPS. pro

full of Operating income $X.XXX Operating year margin was XX-basis-point Operating the Gross percentage revenue results, was X% with -- XX% prior the XX-basis-point representing as a Looking year-over-year. decrease. $X.X billion, increase XX% decrease at posted XX.X%, consistent X.X%, sales year. was from or increase. of prior margin we XX.X%, was billion, expense XX% year.

pro $X.XX EPS Our year. increase from and $X.XX, forma GAAP XX% prior the EPS was was

Next, revenue report and geography. fourth will we segment by quarter

Americas fourth the followed XX% for XX%. Fitness Aviation. in with growth, both three the by growth by segments, we heavily a of XX%, XX%, growth geography, which the grew of all XX% Our is achieved a decline double-digit segment by achieved led By segment, APAC. in our regions growth Marine a EMEA quarter Outdoor segment, more and led five impacted growth by strong

more other line Excluding was to Aviation, in regions. growth Americas

consolidated in Fitness with regions For by the X% XX% achieved growth full XXXX, in segments, growth EMEA, each three five excess Marine, all XX% of By growth in Outdoor geography, three of Americas double-digit in achieved grew growth growth both XX%. strong our APAC. year we and we led and

increased engineering year-over-year, operating to to personnel related next operating expenses. other and programs. development OEM primarily million quarter Fourth to costs, $XX Auto $XX million Research expenses by Looking expenses due increased or XX%.

fourth cash $X $XXX the sheet, cash to and year. We ended increased increased with million $X information related as dividends. balance quarter, statement percentage SG&A the in million approximately the The to a billion. XX Our point is and in balance increase on and increased year-over-year costs quarter free $XX sequentially the year million compared to decrease quarter. securities highlights advertising decreased decrease flow to due basis million. prior technology approximately SG&A few in generated we for increases to sales quarter. primarily the the prior cash $XXX In receivables prior with A quarter XXXX, expenses. Inventory flow to of strong expense the due Account personnel XX.X%, of marketable million. a sales year-over-year $XXX

full due million the operating XXXX, For earnings the needs. $XXX approximately for year to million, flow cash increase improved decreased free generated we of $XXX capital prior year

cash or For payment. $X.XX facility be increase and Taiwan to expenditures. project announced capital a XXXX, quarterly per capital in cash of current approximately dividend our renovation million to share. the We platforms restarting projects. to the workspace Europe seek $X.XX our dividend Olathe and manufacturing Olathe investments our June in year-over-year including share increase we $X.XX manufacturing previous expect with related is $XXX the increase, $XXX per the for expansion facility XX% expenditures Auto growth Proposal, an due the flow our IT free of of of facilities, to from quarter. which OEM approval of increase This The approximately capacity, million and expansion per plans includes expected distribution dividend the beginning share XXXX manufacturing per shareholder for

from to XXXX, prior is full reported of our concludes The could property tax fiscal For the year, effective Q&A? for United please Switzerland to year primarily forma remarks. rate effective That XXX-basis-point is formal migration you decrease XXXX year XX.X%. line the ownership Pro Joel, rate pro flat tax virtually to XX.X% intellectual forma of be tax rate States. effective XX.X%, due the open year-over-year. expected we

from Our Suisse. with Robert first you. Crédit Thank [Operator comes Instructions] question Spingarn

now is Your open. line

Hi. Good morning.

Morning. Good

the I the in a side? operating things, couple R&D the dig off, guidance wanted just of on bit numbers. auto for could to from margin just bridge margin, the little Doug, ‘XX, starting good that operating is decline a on we the very in Cliff, if but in just ‘XX, that more

Yeah.

it of operating relatively XX of Yeah. lower on basis you a So, a bit a our to yeah, the about bit color primarily on due margin was increasing. -- expense are XXX the there. points higher we that. was It’s percentage to basis But at a as at gross maybe a as a little I’d If of give points look give you sales. to expenses, XXXX percentage sales little color we anticipating be comparable operating

of Looking expenses. due to expense, to slightly And sales increase, pieces, R&D. at That’s we that as SG&A relatively advertising will be anticipate a each well mentioned, year-over-year. we of the up as then be IT target as as personnel-related think. the primarily really flat percentage by other increased you is driven

that segments. sales other to you if parts we basis our look investments as are year-over-year about see be driven big So, anticipating a investments higher we piece really percentage but that there. other Auto a It’s of by of to at of relating in the in XXX R&D, that points OEM

I Okay. think is just there outstanding. general, about way But market And just there Marine. parse by two then, different is it specifically improvement? it the mean topline I Cliff, just in am -- a the segment those to in on strength growth to about the year, factors? market share any versus thinking way was

think, Marine, there’s size increase, looking market I share as market well combination a And specifically as Yeah. definitely at gains. of

on of and product able of so been the top you essentially the then line is they those their builders And are anywhere rates. and been of has so broadly growth market things. from we If double increasing in digits business, strong high-single at in our have the those boat terms kinds underlying increase double Marine, look the probably leverage that, share to digits our at business experiencing to and in market

Have a semiconductor shortages constrained Okay. anywhere? you all final been at then as by And question. just

that… Yeah. I would say

Okay.

tightness on It levels in of depends some experiencing the spotty. supplier. and are it’s component supply, the the we …that

We kinds there’s in about agile operate and have of of this able we through integration But strategy things are vertical to that generally been stock we our those safety lots environment and constraints that and find in can and more challenging headlines inventory work environment. also noticeably of substitutes going. with we course same our keep definitely with because

have So to believe that too. us able so those But okay. we are manage factors that been we far for

So there’s assuming will guide nothing pressure any in it? you anticipates there, significant you work through that the are

at are you very consumer we the if and at look guidance, in trends heavily level a think year. our influenced company I by it’s the early that’s high

to that those supply or constraints things. sure or So, always haven’t I that, because significant would But we haircuts say, that that try of that component the make kind like we the anything of factor in as kinds just as we of dynamics far serve. of taken any markets necessarily capacity general we

Thank both. Okay. you,

Thank you.

Thank you.

with Research. comes question Todorov Nik Longbow next Our from

line now open. Your is

Congrats Cliff, you the any wondering, travel you on have thinking guys. second the impressive. leisure the normalization Do really was in and going world impact your great are in demand recovery Hi, everything rolling for about on? the the Yeah. half industries a vaccine with believe products? how the out results, potential I on in and will

probably I remains that would to but speculative the that infect still that coming sick answer and take don’t ensure I is a nobody the that much people time to to There’s really have lot as do about get really how normalization won’t help, for of And lifestyles. have say someone have else. consequently activities. it that’s in Well, of thing free And permanently. be have, believe a to. out seen couldn’t guidance this for people makes still of they vaccine probably those priorities people vaccines of changed still kinds necessarily they feel or now I their some that, situation the some kind knows we a think highly myself, year adjusted going been any

It’s all So, these days. still things are are that processing. early people

we solid the year the and believing now that been have business so will the past seeing are we are in continue. trends that And right over

really then detail segment. If you have side, Auto the And we OEM guys look new about at throughout how ‘XX? year? linearity the we and breakdown start will Great. ramping I Okay. year in for Do the calendar should the up that appreciate the think programs

Yeah.

programs, yet to on anniversaried mentioned, up start We Daimler not are the ramping production I really Vito has two a there.

associated will supplying. we BMW, there the the that So ramp current be are And that. with a significant program then

supplier of the we that, year full again the early those in builder production days can programs. so As in are will a experience two on on production we

question Great. me. Okay. And last the for

on pretty points. a for should basis hundred -- we forward? you had you think your margin that current maintain margin, expanded to about been tailwind as know I a side, Fitness How go couple the has I you good of Fitness a year for On anticipate year? the think, we Do this gross you mix gross level,

mostly competitive there. so bands to influencing low highly more our aren’t and our transitioned We Yeah. the product really the as line wearables businesses advanced much end

kind we gross of So, before believe to mid- of is said margin and line, Fitness we targeting XX% course, margin on percent have business the for and upper-XXs segment. to in plus the continue that, a the margin operating

Okay. luck. Thanks, Got Good guys. it.

you. Thank

comes JPMorgan. with Our Chung next from Paul question

Your now line is open.

and taking Hi. my for great Thanks quarter. questions

margin thoughts longer in and ‘XX investments in kind up. I So operating does some expansion? would after Fitness, helpful do as and have and you to if XQ range high-teens maybe return Marine just there, by a then kind to weighing that do on come Any down on we granular segment, that a normalize a or could investments low-XXs term R&D you get bit? more guidance, mentioned, this on maybe you be on begin follow-up strong of a but low-XXs Aviation, increasing Thanks. follow stay tax OEM, Auto of and Outdoor or

Yeah.

Go ahead. Yeah.

them being of on probably say, we couple one lower, XXXX some a relates OEM. is will or consistent little should and relatively of lower margins, year-over-year. A most bit Auto probably I which be As see the of segments operating

continue we margin. see programs of investments to as gross we the As OEM, came newer lower have also some the down our make gross there in Auto will a margin some

our we decline in then, growth Auto upon how have depends relates And operating So, expenses. expansion growth depending revenue and OEM you some there. to so upon will the Aviation, in the there, all

to et about Thanks you for revenues But you you parts of of then, as hefty service and that. other base. But your where of revenue then smaller it kind products. expand inReach recurring -- though, of you those you you maybe a of But more do subscriptions kind And kind with subscription across services premiums potential, of you. we your also your maybe of higher drive some for plans Okay. are monthly have portfolio, Thank and if cetera, offerings though. type base in video tech trails, kind just then going then sounds have scale These across think expect contribution kind nice whole on subscription could ‘XX. like portfolio? see across where relative see in

lot on that inReach It’s we of that and that believe customer in potential. are focus unique potential within intentional so inReach the more would grow appeals that. that would future, continues as far to have make of and there especially there’s and future. like opportunities, things kind customer I out be to have have But, that would XXXX the we that to a appeal say to recurring a we do more is the will works so capability products as an the a we the we and in base areas that that, into other come lot base opportunities, but both revenue the targeting

Thanks, guys.

Thank you.

you. Thank

Bollin Our next Research. from Cleveland with comes question Ben

Your now open. line is

think to how business What over programs? that on bit you bit Good as OEM, business it morning, years? by several how you little that can about new margin there about some talk to talking you about Is time? next everyone. Thank performance start Maybe scaling? the or scale you could Cliff, the the a operating for absorbed over little question. right bring expenses? that is incremental any taking see Just Auto you a happens way

Yeah.

of won the head period right are is there. base is think programs a you think This building overall we definitely establish have definitely now need. feel than of the in on a profile different we But significant course, towards I the working what we business, that’s nail and scale that a I of the are kind are now credibility. hitting that we I margin investment -- of rest with the the margins, be in lower of But the witnessing And one biggest opportunity operating and are place companies personal so recognize many, industry. business taking gross it our into result, right now. lower a we which that also we as that of and to technology. transportation will margins transformations by consistent of presented there’s many this the trying get are are turnover

And so is we we will to have we bring our invest. as belief be some things that the now. in putting that And make. are so the scale that new the able have definitely incremental we we we market are of infrastructure on bringing leverage would to and programs, that to be But continuing to place are there we investments

Okay.

and last is, Another Marine on product then Fitness, instance, availability supply balance and Outdoor up? any you demand item for inventory a where thoughts interested I today, stands across in am follow current have for channel channels,

Yeah.

the I retail are think, clean. that for the very most we channels part, believe

are constraints We the entering one year. the have investing the in coming a as do capacity some significant Year with backlogs of the level for and of as business motivations in have we we New

demand point. at channel see to now And does strong this excessive for so inventory our and we not right products do appear the be

you share M&A, investments utilization terms of to incremental some on related where priorities repurchase any is the about any and structure. last are factory Okay. updates also us Thanks. are and interested making your production My dividend, one thoughts Could CapEx, of expansion? with respect give in in ‘XX you to capital

Yeah.

we attractive think cash being mentioned priorities reliable is for on our dividend. our I of have a an before, pair

coming today, increasing our announced And excited we in will significantly do. which that be in to that the we results are we so again, year,

are that either would also technology product that we that We have complementary through to activity a we enhances ourselves what be our that or business offer. on focused line don’t M&A through a

have today mentioned -- really the priority, our our and to capital end, to priority. significant our we making beyond. some second the capacity that the course, significantly in as Olathe. want that’s that in in business. that, Taiwan ‘XXXX And is capacity, we investments production we increase as investments and here So And will in again well production investing ongoing of third then we We are made be

office will expansion employees. We more restarting support be our to

building of out course, Tacx OEM Auto factory trainers, are for We the factory BMW. the Europe for and in

Thanks, Great. guys.

Thank you. Yeah.

Jeffrey our with Rand Deutsche Thank Bank. you. from And comes next question

now line Your is open.

question taking and on Thanks for Hi. a good quarter. congrats my

that year pretty into strategy the over how shifted a focus you changes past touch much your and Now can the we been from in or adjusted pandemic, there you any maybe pandemic? are year M&A your on have have whether the

no M&A shift were able pandemic. Well, transactions the wise, really and successfully we during to even of those complete some

as the had we Firstbeat well So on board, as GEOS.

presently product as have. continuing especially us we just category And will that for so, I or be have bring mentioned, don’t to we again, technology look opportunities, those that some to of kind

In in have have successful different. But it’s have on very the business, been we collaborating coming in of electronically. we employees -- we and many a our offices basis. do run terms how of been rotating We

have seeing we of full can we distant is because are utilization stay space, and are that our people, making necessarily more But which thing. good we don’t a safe. people So sure more of everyone keeping and faces

all of same. So, kind the that of remains

best I the do to think for thing things and and biggest for end manage right it’s going business kind is of the of simply now. the kind predicting when me through stop

a there? if follow-up, Great. in and running business you still can are And you backlog indoor just trends as are seeing talk your cycling about then demand you the a

seeing increase indoor new capacity. Tacx we output, the backlog is demand to Netherlands our But strong cycling the for for a we in The even are for built product. and very facility are so Yeah. leveraging very with strong increased have that that we

are those work hard orders. we to continuing to So very fill

Great. Thank you.

you. Thank

Thank you.

from Power next Baird. Our comes question with Will

is now line Your open.

a Yeah. specialty expected from of about results. they I the Great. like how do think consumer forward? are to Auto am actually, breakdown. you Yeah. Cliff, already I trying touched guess, puts Congratulations right, Thanks. looks piece? understand you questions. indicated what I front, the heard bit in and the just a again I on for couple the know ‘XX. you guess we I consumer takes on the Thanks growth on OEM consumer I If to think the going grow year-over-year that have opportunities. the

Yeah.

So, you right. heard

in achieve We segment to and consumer business in and contribute both our in to the of segment the expecting all operating OEM year. Auto, are to growth expected the specifically are five XXXX operating growth segments

what’s consumer growth other drive any to going Auto? as And color to within the

the developed other seeing very business. Well, these of same of the areas are that are for some strong in product have categories that we reasons we

overlanding very as we of developed well as So from right -- categories popular all have motorcycles products and and now. and trucks, products are these specialty for

Okay. on your some second opportunities of remind of Fitness, now today in you us, in are capabilities of versus And with ‘XX. that think, integration and Firstbeat you providing my to just respect mentioned, where then Great. I in those the what’s common. question integrating remarks Maybe prepared terms

and Fitness? strategic opportunities about of what opportunities, you As the -- think M&A are you as at there see big kind do

Yeah.

wearables So, their had and was and recycling and a technology of with company working been software into technology previously we terms a our purely company firstly, -- -- it it incorporating so is products. that in

our able to across the for And acquisition we the broadens our feature so of features incorporation been list line accelerate product with have that the customers.

of acquisition. there, for have And probably technology pop-up the those specifics, And that there. would or comment we our matches I can’t to you again, some us. here in but that underway wanted mean, to what sure we for we opportunities part, have to the of them engage that other already the have on see feature sets and really beneficial terms and many in so the Firstbeat criteria each of expanded that’s products historically, most few thanks new look of and that be at done, product And category a make we we a as our

Okay. you. Thank

you. Thank

Thank you.

Our next Ron of America. with question comes from Bank Epstein

is line Your open. now

Hey. Good morning, all.

morning. Good

of a detailed and Just couple a one. some bigger questions, picture then maybe ones maybe

guys I should for tax than and think we going we talking tax when that then think a think about lower thinking. what you ‘XX the So the how little about bit rate rate I were is about was that, forward,

Yeah.

XXXX had is XXXX. for what consistent have we rate tax the for with So, we

lot So that we from think not of standpoint. change a

There’s type obviously, that it would same the we give a upon depending a operating change may of not between ‘XX be income releases, really think and think by guidance in and in in income any I do tax things in and that, jurisdiction, the But into those the type range in think upon, future consistent segment, by laws things that -- ‘XX. next reserve of But it’s income, for enactments depending relatively I we as Ron, there. of play that probably things with such. lot years. future Now our

Got it. if was Cliff, for ADS-B? Got about headwind And a growth, then, pro mentioned you ADS-B, Aviation is -- big you it. that forma how

equip in significant with opportunity a a to generation was definitely it Well, once every technology. aircraft

of. could to very am ADS-B we aircraft wildly fact And headwinds so hard that every those proud which with successful, by that have supply is headwinds very and worked right that we we I were now, some possibly we are the demonstrated but

remove I in they in we of all questioning, good business grew am hit you right? guess Aviation a evidenced not But the and capacity the come maybe am parts business, recovery it’s stuff. you ADS-B when mean, I and that Aviation less haven’t I other that’s it piece than by were mean and mean it as private what of yet. of Aviation think if potentially seems Yeah. really back got utilization that business get hit, trying to Aviation I mean, far that, I into ‘XX at, about obviously, -- ‘XX, No. into I

private So to what get, into if trying that to a Aviation, more upturn were business for am just would mean get like, you I guys. in robust we meaningfully

do understand of the So question? sort you like, it’s

Yeah.

was last at the as For out. aviation general time options the pandemic definitely this might that that how they it that provides about flexibility have we travel believe had mentioned erupting people we this year play future have the concerns because sure. bright and of we And that a seen that and throughout

advantage are segment, aircraft news owner-flown so seeing in their we demand are As especially also charter and mentioned playing an smaller they uptick I and remarks, my that on hearing from as the positioned are fractional companies one is strongly every that. and strong of in and that’s we the segment the out again, in demand And smaller we exactly just forward, take of we to in as aircraft platforms those look the super thought.

light through the positioned people the market on we as jet up ideally meet those owner-flown jets and are in for are Piston right the so places categories medium to We the the all side of demand. in all well in be to able

a of into you that that folks to Garmin then have you. maybe does universe, are stickiness, customers kind shifting of keep a product? once sense in Got them locked Connect, and Garmin do And

that ever sure. wouldn’t about for Garmin and lose your manage that decade to it’s know I store other place that I be to important many a feel I there’s data yourself and Connect most you that history able Well, way a and of customers to where want health. on the have

sticky that are that in so And are super tools it’s to for something continue features the and use. and are Connect Garmin people they useful

balance then And you. a last Got maybe sheet one question. question,

net efficient mean, your that’s the not use cash ways of balance the sheet. have I most to guys you clearly, So $X billion.

I think so think or deployed either around And do But -- earlier capital should that $X sitting how to balance mean, in mean, someone somewhere? else product, deployment about so you billion forth. I I sheet, be and someplace that? about on a else shareholders isn’t you back asked new with of

Yeah.

forward. on we support I demonstrated that think, going are we to obviously we business have up see investments our capital that stepping the spending

one thing. that’s So

companies increasing a year for little acquisition are an so The past not weather some in the year as have in things. our to cash didn’t was the is concerned those tanking dividend been thing have business money have we on spent was some definitely cash economy that ago and and so fact a We on is mode, hand bad a we the that having everyone enough about sure. growing, more

of means dividends as have as structure. it’s can to in at to We rate we the right that we which can efficiently possible, dividends to distribute or sure we around shareholders capital concerns been will that’s now. do that deploy position constraints that we and free that’s always buybacks continue have We want where make withholding So capital be. we done and amount strong a a tax have and whether a certain

people being we in be we reliable are very with long-term. can for careful that to And make so and that the sure attractive

you. Got it. Thank All right.

Thank you.

Thank you.

Ivan from Feinseth with Tigress comes question next Financial. Our

Your now line is open.

taking congratulations my on… question congratulations you great Thank year on and and for another quarter and a

Thanks.

by they functionality planes? the you that unique supports in selecting Were selected of the being or the types in new there terms GXXXX. eval of Joby your … functionality been incorporating GXXXX -- for are have

we Yeah. in the designed These so it the are definitely and incorporated we like be kind other need that that aircraft to unique into. every e-vehicles onboard have platforms being that specific have electronics, characteristics of just and have seen avionics those general, in -- for

So we we are and doing Joby with. thing are others with the working the same

competitive that keep And advantage was and what and new do -- you -- is you want your hopefully, winning these this, mandates?

have we most a these systems that’s obviously, the attractive so, for capable aircraft Well, point. avionics and major

We reliable OEMs being as aircraft, partner have avionics production a are as and we our in equipment. certified a a significant amount that our of for as use both company experience well

Garmin all opportunities. these of sort as so for definitely look of And at are these new we things pluses

be can or as in this well? included automatically Autoland included is Now

Yeah.

opportunities. specifically across well fixed-wing, be would applied strong a we well. amassing autonomous base that. and these think But obviously comment broadly I safety for helicopters of and with basis for I technologies Joby a can’t case-by-case that on as Autoland aircraft new be as technologies are as e-vehicles can

of incorporate on your you then, And hope new see products? acquisition can functionality to what into Firstbeat, Firstbeat of more as type new Okay. the we

especially have but people as health we well. as a are been team physiology really wellness because about of well Well, and excited Firstbeat, focused on basic physiology as exercise they

capability in health they our people to and more of live to healthier for feedback data able to to of be providing their of products their guidance are And can so be terms to health in modify in we expertise sensing, leveraging life terms improve on fit. people how a and order lot

And developer to new you you IQ on Firstbeat have to plan And opportunity develop developer functionality your then, the use a to applications with or going products? will what -- then, open going for to to is for the developer, that? with are going developers conference on this your work are spring what’s or up

I or anticipate some today Yeah. money able the we actually year. them know on would of the But because we our take will it that’s based take of Last to spend allowed when partners same that, did otherwise wouldn’t this approach many appreciated time year them we to a to travel. virtual. what the be that participate

of would platform, something But approach are So what the developers we about probably unique on be of going hardware to would but opened of features for that’s allow part I terms people capabilities anticipate virtual in approach our that things a our forward. adding our access platforms a that specific continually can’t Firstbeat, also up make comment the stack. software we and are

a of thoughts where quality of this any to about there’s eventually a pay it form see and And more number e-commerce you of -- PayPal, helping through of Garmin platform promote some commission, applications an there for Connect free, because well as are developers apps creating you through but formal available? for no real like as earns there’s that process that, still making IQ process goes and Garmin can lot some companies those

us something for level to a of it’s I get something and developers. from would that that’s say requests interest our we that high still

So way continuing are look our best it to we that work to and to into at trying determine ecosystem. the

All a you XXXX. and right. very much. Thank wish you Congratulations again great

Ivan. you, Thank

you. Thank

Stanley. Woodring Our question with next from Erik comes Morgan

Your line is now open.

Congrats and think we great morning, want high on I the level. Thanks, everyone. good and maybe step a -- if quarter. to a take on just start, back

as is -- this more roadmap as us believe it then now What we sit are guess XX-plus how impact your will product gone does pandemic the through months. be influence behind you the permanent I are whatever today? even some of for and is or have We trends pandemic here that

Yeah.

excited time conditioning a been for times conversations pot new And reveal actually and think themselves the changes they love. people that long with coffee people many now basically about have choices. will of many basically I are lifestyle

are things getting on that people so something these thinking that And are it on lifestyles, and and ingrained adventure, say a three to and that active embedded habit and takes they focused form in weeks have lifestyles so value. only their people healthier as

how us we viewing more experiencing be So term trends that for are longer believe and positive so we that are kinds will they that are these we we believe and this. things that’s of things

you. call maybe or anything business, is Okay. quarterly if think certain of lumpiness even revenue there I cadence the to Auto the term terms in of XXXX? as And as revenue a that we can retouch in quarter then, we be about out Thank abnormal of guess, a seasonality, just OEM on in

say. hard probably it’s to Well,

supply are the addition think I production to in the production. constraints it components challenges when own on their ramping of are needing experiencing automakers that a they up and to programs, for year-on-year chains effects comes new

chaotic in probably probably unfortunately, general we as and be to I that So, we those expect serve it’s face that and a would for a little will that bit going for am in have the automakers challenges well. sense speaking to work ones

production. constraints gone Okay. the expanding to on what are customer through bit that and the find it name Fair or and and have willing to however brand longer the to Do consumers just those perishable Tacx a question Thanks. know demand enough. And then, guess, get want maybe, reactions be seen you wait last one I may supply of long in wait have times? -- be are I of we and Tacx you But to they then products? terms of what is

us, supply definitely is are constraints unique cycling, the the in entire and industry is from general, think not constraints like I now. suffering to right

So and to our people a sure, very cycling. we to anxious they increased. ramped are good equipment we obviously, that like be, that but to most people wait have seems their aren’t indoor has don’t as time have with to we are to them very also happy the been the backorders it demand hard up have news when working get fulfill they really for production expect long equip want the houses And

that are product, the believe there product. love to we to have people superior so and they we believe to And out our willing anything it’s wait

Okay. Thank guys. helpful. That’s you, super

you. Thank

Todorov question Longbow with next comes from Nik Research. Our

now open. Your line is

experienced but I that’s clarified that follow up, was of of said kind the implies sales a Auto Auto Consumer products year side. $XX who million Auto you think, segment XXXX. that the grow quick case, of to kind consumer that December on in expect A I heard up I Daimler see peak or am Am be talking something, would about BMW? correctly ramping because with reason near-term. Is thinking know I a the I next and have are three programs you I two, If guys. this would thought I in December missing that nice seen in I you is that whole you I OEM? growth, but you down production Yeah, any think why the for for the new and OEM March Cliff, think, to Auto quarters then going peak in linearity be going think June, forward? there

Yeah.

down comp the to as as against as shutting and is it think last we comp first from introductions. of back automakers half going some then year half capacity were But be favorable these program should even challenges towards I against the new reducing year factories. out we probably the

Okay.

sequentially Auto first So expect is in down from get trying specially? in half am what be the you to I December, OEM to

from level out there. I then grow sequentially the expect into actually Yeah. first that would half and to

Okay.

will see growth So OEM the for whole consumer also XXXX?

we what That’s Yeah. mentioned.

Okay.

Thanks. Okay.

not I to you. Teri would am further Thank questions showing call I to time. like back Seck now any for over turn at the this closing remarks.

will callbacks day. great for a talk days weeks. available Doug us the a you, joining are and coming Bye. Thank for everyone, Have today. I in and with and you of lot we

gentlemen, concludes today’s conference call. and Thank Ladies you participating. this for

now may disconnect. You