Press Release

Garmin reports fiscal year 2018 revenue and strong operating income growth; proposes dividend increase

February 20, 2019 7:00 AM EST

Garmin Ltd. (Nasdaq: GRMN – News) today announced results for the fourth quarter and fiscal year ended December 29, 2018.

Highlights for the fourth quarter 2018 include:

  • Total revenue of $932 million, a 4% increase, with aviation, marine, outdoor and fitness collectively increasing 13% over the prior year quarter
  • Gross margin improved to 58.9% compared to 56.1% in the prior year quarter
  • Operating margin improved to 23.9% compared to 20.4% in the prior year quarter
  • Operating income of $223 million, representing 21% growth over the prior year
  • GAAP EPS was $1.00 and pro forma EPS(1) was $1.02 for fourth quarter 2018, representing growth of 26% over the prior year
  • Recently signed an agreement to acquire Tacx, a leading provider of indoor bike trainers
  • Launched our first marine chartplotters with a combined Garmin and Navionics® chart database, offering industry leading breadth and depth of coverage

Highlights for the fiscal year 2018 include:

  • Total revenue of $3,347 million, a 7% increase, with aviation, marine, outdoor and fitness collectively increasing 16% over the prior year
  • Gross margin improved to 59.1% compared to 57.6% in the prior year
  • Operating margin improved to 23.3% compared to 21.9% in the prior year
  • Operating income of $778 million, representing 14% growth over the prior year
  • GAAP EPS was $3.66 and pro forma EPS(1) was $3.69, representing 22% growth over the prior year
  • Launched new categories of innovative wearables including Instinct™, a GPS smartwatch that expands the market for adventure watches, and Descent™, a dive computer in a watch style design for recreational, technical and free divers
  • Expanded our portfolio of music compatible devices and integrated seven music providers into our Connect IQ™ app store including Spotify, Deezer and KKBOX
  • Shipped nearly 15 million units and over 205 million since inception, including over one million certified aviation products.
  • Completed the strategic acquisitions of FltPlan, a leading electronic flight planning and service provider, and Trigentic, a privately-held worldwide provider of marine electronic digital switching
  • Opened our new aviation manufacturing facility in Olathe, Kansas, more than doubling our North American manufacturing capacity
                   
(in thousands,     13-Weeks Ended       52-Weeks Ended    
except per share data)     December 29,   December 30,   Yr over Yr   December 29,   December 30,   Yr over Yr
        2018       2017     Change     2018       2017     Change
Net sales     $ 932,108     $ 897,319     4 %   $ 3,347,444     $ 3,121,560     7 %
Aviation       158,314       129,800     22 %     603,459       501,359     20 %
Marine       94,652       83,699     13 %     441,560       374,001     18 %
Outdoor       254,568       203,278     25 %     809,883       698,867     16 %
Fitness       277,014       276,195     0 %     858,329       762,194     13 %
Auto       147,560       204,347     -28 %     634,213       785,139     -19 %
                           
Gross margin %       58.9 %     56.1 %         59.1 %     57.6 %    
                           
Operating income %       23.9 %     20.4 %         23.3 %     21.9 %    
                           
GAAP diluted EPS     $ 1.00     $ 0.75     33 %   $ 3.66     $ 3.76     -3 %
Pro forma diluted EPS (1)     $ 1.02     $ 0.81     26 %   $ 3.69     $ 3.02     22 %
                           
(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:

“2018 was another remarkable year of revenue and operating income growth driven by strong performance in our aviation, marine, outdoor and fitness segments,” said Cliff Pemble, president and chief executive officer of Garmin Ltd. “Entering 2019, we see many opportunities ahead and believe that we are well positioned to seize these opportunities with a strong lineup of products across all of our segments.”

Aviation:

Revenue from the aviation segment grew 22% in the quarter with contributions from both the aftermarket and OEM categories. Gross and operating margins were 73% and 33%, respectively, resulting in 27% operating income growth. Aftermarket systems and ADS-B solutions contributed to our positive results as we move toward the ADS-B mandate deadline. We were honored to receive the supplier of the year award from Airbus Helicopters, and recently ranked #1 in avionics support for the 15th consecutive year by both Professional Pilot Magazine and Aviation International News.

Marine:

Revenue from the marine segment grew 13% in the quarter driven by our new lineup of chartplotters, advanced sonars, and cartography offerings that combine the best of both Garmin and Navionics content. Gross and operating margins improved to 58% and 9%, respectively. We recently began shipping the 2019 lineup of marine electronics including the GPSMAP® 8600 series, our flagship product line with combined Garmin and Navionics chart content.

Outdoor:

Revenue from the outdoor segment grew 25% in the quarter with significant contributions from adventure watches. Gross and operating margins improved to 67% and 38%, respectively, resulting in 31% operating income growth. During the quarter, we launched Instinct, our newest line of adventure watch, and the GPSMAP 66 series of outdoor handhelds.

Fitness:

Revenue from the fitness segment was flat in the quarter compared to a strong prior year quarter. Gross and operating margins increased to 52% and 21%, resulting in 2% operating income growth. We recently introduced the vívoactive® 3 Music with 4G LTE, bringing connected safety features to the wrist. The pending acquisition of Tacx is an exciting opportunity to expand into the year-round indoor cycling and training market.

Auto:

The auto segment recorded revenue decline of 28% in the quarter, primarily due to the ongoing PND market contraction and lower year-over-year OEM sales. Gross margin improved to 43% and operating margin declined to 5%. At the recent Consumer Electronics Show, we announced our new line of Drive™ navigators with simplified, road trip-ready features and our updated OEM scalable infotainment platform.

Additional Financial Information:

Total operating expenses in the quarter were $326 million, a 2% increase from the prior year. Research and development increased 10%, primarily due to engineering personnel costs. Selling, general and administrative expenses decreased 2%, due primarily to reduced litigation related costs. Advertising decreased 6%, primarily due to lower media spend as we strategically focused our promotions.

The effective tax rate in the fourth quarter of 2018 was 18.0% compared to the pro forma effective tax rate of 20.5% in the prior year quarter. The decrease in the current quarter effective tax rate is primarily due to the benefits from U.S. tax reform.

In the fourth quarter of 2018, we generated approximately $185 million of free cash flow (see attached table for reconciliation of this non-GAAP measure). We ended the quarter with cash and marketable securities of approximately $2.7 billion.

2019 Guidance (2) :

We currently expect 2019 revenue of approximately $3.5 billion as growth in fitness, aviation, outdoor and marine is partially offset by declines in the auto segment. We currently expect our full year EPS will be approximately $3.70 based upon improved gross margin of approximately 59.5%, operating margin of approximately 22.7% and a full year effective tax rate of approximately 16.5%.

     

 

            Revenue
                    Growth
          2019 Guidance     Segment   Estimates
      Revenue   ~$3.5B     Fitness(3)   ~13%
      Gross Margin   ~59.5%     Aviation   ~10%
      Operating Margin   ~22.7%     Outdoor   ~10%
      Tax Rate   ~16.5%     Marine   ~10%
      EPS   ~$3.70     Auto   ~(18%)
                     
      (2) See attached discussion on Forward-looking Financial Measures
      (3) Fitness revenue growth estimate assumes the acquisition of Tacx will close within the second quarter of 2019
       

Dividend Recommendation:

The board of directors intends to recommend to the shareholders for approval at the annual meeting to be held on June 7, 2019, a cash dividend in the amount of $2.28 per share (subject to possible adjustment based on the total amount of the dividend in Swiss Francs as approved at the annual meeting), payable in four equal installments on dates to be determined by the Board. The Board currently anticipates the scheduling of the dividend in four installments as follows:

          Dividend Date     Record Date     $s per share
          June 28, 2019     June 17, 2019     $0.57
          September 30, 2019     September 16, 2019     $0.57
          December 31, 2019     December 16, 2019     $0.57
          March 31, 2020     March 16, 2020     $0.57
                       

In addition, the board of directors has established March 29, 2019 as the payment date and March 15, 2019 as the record date for the final dividend installment of $0.53 per share, per the prior approval at the 2018 annual shareholders’ meeting. The first, second and third payments of $0.53 per share were made on June 29, 2018, September 28, 2018, and December 31, 2018, respectively.

Revenue Standard Adoption

We adopted the new revenue standard in the first quarter of 2018. The prior periods presented have been restated to reflect adoption of this new standard.

Webcast Information/Forward-Looking Statements:

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

      When:     Wednesday, February 20, 2019 at 10:30 a.m. Eastern
      Where:    

http://www.garmin.com/en-US/company/investors/events/

      How:     Simply log on to the web at the address above or call to listen in at 855-757-3897
             

An archive of the live webcast will be available until February 27, 2020 on the Garmin website at www.garmin.com. To access the replay, click on the Investor Relations 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 “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with similar meanings. Any statements regarding the Company’s 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, currency movements, expenses, pricing, new products to be introduced in 2019, 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 29, 2018 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2018 Form 10-K can be downloaded from https://www.garmin.com/en-US/company/investors/sec/form-10-K/ .

Non-GAAP Financial Measures

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, Navionics, GPSMAP and vívoactive, are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S.; Descent, Drive and Instinct 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

                   
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
                   
      13-Weeks Ended   52-Weeks Ended
      December 29,   December 30,   December 29,   December 30,
        2018       2017       2018       2017  
Net sales     $ 932,108     $ 897,319     $ 3,347,444     $ 3,121,560  
                   
Cost of goods sold       382,942       393,837       1,367,725       1,323,619  
                   
Gross profit       549,166       503,482       1,979,719       1,797,941  
                   
Advertising expense       55,394       58,711       155,394       164,693  
Selling, general and administrative expense       125,942       128,879       478,177       437,977  
Research and development expense       145,157       132,552       567,805       511,634  
Total operating expense       326,493       320,142       1,201,376       1,114,304  
                   
Operating income       222,673       183,340       778,343       683,637  
                   
Other income (expense):                  
Interest income       14,837       9,994       47,147       36,925  
Foreign currency losses       (4,211 )     (8,772 )     (7,616 )     (22,579 )
Other (expense) income       (1,426 )     (107 )     5,373       (912 )
Total other income (expense)       9,200       1,115       44,904       13,434  
                   
Income before income taxes       231,873       184,455       823,247       697,071  
                   
Income tax provision (benefit)       41,723       41,905       129,167       (11,936 )
                   
Net income     $ 190,150     $ 142,550     $ 694,080     $ 709,007  
                   
Net income per share:                  
Basic     $ 1.01     $ 0.76     $ 3.68     $ 3.77  
Diluted     $ 1.00     $ 0.75     $ 3.66     $ 3.76  
                   

Weighted average common shares outstanding:

                 
Basic       188,878       187,607       188,635       187,828  
Diluted       190,177       188,915       189,734       188,732  
                   
             
Garmin Ltd. And Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except per share information)
             
      December 29,     December 30,
        2018         2017  
Assets            
Current assets:            
Cash and cash equivalents     $ 1,201,732       $ 891,488  
Marketable securities       182,989         161,687  
Accounts receivable, net       569,833         590,882  
Inventories       561,840         517,644  
Deferred costs       28,462         30,525  
Prepaid expenses and other current assets       120,512         153,912  
Total current assets       2,665,368         2,346,138  
             
Property and equipment, net       663,527         595,684  
             
Restricted cash       73         271  
Marketable securities       1,330,123         1,260,033  
Deferred income taxes       176,959         195,981  
Noncurrent deferred costs       29,473         33,029  
Intangible assets, net       417,080         409,801  
Other assets       100,255         107,352  
Total assets     $ 5,382,858       $ 4,948,289  
             
Liabilities and Stockholders' Equity            
Current liabilities:            
Accounts payable     $ 204,985       $ 169,640  
Salaries and benefits payable       113,087         102,802  
Accrued warranty costs       38,276         36,827  
Accrued sales program costs       90,388         93,250  
Deferred revenue       96,372         103,140  
Accrued royalty costs       24,646         32,204  
Accrued advertising expense       31,657         30,987  
Other accrued expenses       69,777         93,652  
Income taxes payable       51,642         33,638  
Dividend payable       200,483         95,975  
Total current liabilities       921,313         792,115  
             
Deferred income taxes       92,944         76,612  
Noncurrent income taxes       127,211         138,295  
Noncurrent deferred revenue       76,566         87,060  
Other liabilities       1,850         1,788  
             
Stockholders' equity:            

Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 189,461 shares outstanding at December 29, 2018 and 188,189 shares outstanding at December 30, 2017

      17,979         17,979  
Additional paid-in capital       1,823,638         1,828,386  
Treasury stock       (397,692 )       (468,818 )
Retained earnings       2,710,619         2,418,444  
Accumulated other comprehensive income       8,430         56,428  
Total stockholders' equity       4,162,974         3,852,419  
Total liabilities and stockholders' equity     $ 5,382,858       $ 4,948,289  
             
             
Garmin Ltd. And Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
       
      52-Weeks Ended
      December 29,     December 30,
        2018         2017  
Operating activities:            
Net income     $ 694,080       $ 709,007  

Adjustments to reconcile net income to net cash provided by operating activities:

           

Depreciation

      64,798         59,895  
Amortization       31,396         26,357  
Gain on sale or disposal of property and equipment       (479 )       (230 )
Provision for doubtful accounts       2,123         1,021  
Provision for obsolete and slow moving inventories       24,579         31,071  
Unrealized foreign currency loss       13,790         21,681  
Deferred income taxes       38,978         (90,000 )
Stock compensation expense       56,391         44,735  
Realized losses on marketable securities       827         991  
Changes in operating assets and liabilities, net of acquisitions:            
Accounts receivable       5,167         (40,088 )
Inventories       (82,316 )       (38,575 )
Other current and non-current assets       7,358         (21,608 )
Accounts payable       40,628         (17,240 )
Other current and non-current liabilities       (1,323 )       5,627  
Deferred revenue       (17,208 )       (20,754 )
Deferred costs       5,611         2,395  
Income taxes payable       35,120         (13,443 )
Net cash provided by operating activities       919,520         660,842  
             
Investing activities:            
Purchases of property and equipment       (155,755 )       (139,696 )
Proceeds from sale of property and equipment       1,600         361  
Purchase of intangible assets       (4,600 )       (12,232 )
Purchase of marketable securities       (403,181 )       (587,656 )
Redemption of marketable securities       283,603         635,311  
Acquisitions, net of cash acquired       (29,170 )       (90,471 )
Net cash used in investing activities       (307,503 )       (194,383 )
             
Financing activities:            
Dividends       (296,148 )       (382,976 )
Proceeds from issuance of treasury stock related to equity awards       26,642         21,860  
Purchase of treasury stock related to equity awards       (16,655 )       (12,773 )
Purchase of treasury stock under share repurchase plan       -         (74,523 )
Net cash used in financing activities       (286,161 )       (448,412 )
             
Effect of exchange rate changes on cash, cash equivalents, and restricted cash     (15,810 )       26,716  
             
Net increase in cash, cash equivalents, and restricted cash       310,046         44,763  
Cash, cash equivalents, and restricted cash at beginning of period       891,759         846,996  
Cash, cash equivalents, and restricted cash at end of period     $ 1,201,805       $ 891,759  
             
                         
Garmin Ltd. And Subsidiaries
Net Sales, Gross Profit and Operating Income by Segment (Unaudited)
(in thousands)
                           
      Reportable Segments
                           
     

Outdoor

 

Fitness

 

Marine

 

Auto

 

Aviation

 

Total

                           
13-Weeks Ended December 29, 2018  
                           
Net sales     $ 254,568   $ 277,014   $ 94,652     $ 147,560   $ 158,314   $ 932,108
Gross profit       169,425     145,291     54,779       63,405     116,266     549,166
Operating income       95,798     58,446     8,536       6,888     53,005     222,673
                           
13-Weeks Ended December 30, 2017  
                           
Net sales     $ 203,278   $ 276,195   $ 83,699     $ 204,347   $ 129,800   $ 897,319
Gross profit       128,952     146,622     45,902       84,954     97,052     503,482
Operating income       73,322     57,315     (10,533 )     21,365     41,871     183,340
                           
52-Weeks Ended December 29, 2018  
                           
Net sales     $ 809,883   $ 858,329   $ 441,560     $ 634,213   $ 603,459   $ 3,347,444
Gross profit       528,254     471,764     258,756       270,793     450,152     1,979,719
Operating income       290,510     181,745     63,344       37,998     204,746     778,343
                           
52-Weeks Ended December 30, 2017  
                           
Net sales     $ 698,867   $ 762,194   $ 374,001     $ 785,139   $ 501,359   $ 3,121,560
Gross profit       448,410     422,636     212,592       342,698     371,605     1,797,941
Operating income       249,867     146,765     50,328       82,744     153,933     683,637
                           
                           
Garmin Ltd. And Subsidiaries
Net Sales by Geography (Unaudited)
(In thousands)
           
      13-Weeks Ended   52-Weeks Ended
      December 29,   December 30,   Yr over Yr   December 29,   December 30,   Yr over Yr
        2018     2017   Change     2018     2017   Change
Net sales     $ 932,108   $ 897,319   4 %   $ 3,347,444   $ 3,121,560   7 %
Americas       443,386     431,948   3 %     1,596,716     1,504,194   6 %
EMEA       342,853     340,850   1 %     1,204,969     1,172,538   3 %
APAC       145,869     124,521   17 %     545,759     444,828   23 %
                           
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 net income (earnings) per share, pro forma effective tax rate 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 disclosure of 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 2018, there were no such discrete tax items identified.

                     
Garmin Ltd. And Subsidiaries
Pro Forma Effective Tax Rate
(in thousands, except effective tax rate (ETR) information)
                     
      13-Weeks Ended     52-Weeks Ended
      December 30,     December 30,
      2017     2017
                     
        $     ETR (1)       $     ETR (1)
U.S. GAAP income tax provision (benefit)     $ 41,905     22.7 %     $ (11,936 )   (1.7 %)
Pro forma discrete tax items:                    
Switzerland corporate tax election(2)       11,279             180,034      
Tax expense from share-based award expirations(3)       (15,345 )           (22,620 )    
Total pro forma discrete tax items       (4,066 )           157,414      
Income tax provision (Pro Forma)     $ 37,839     20.5 %     $ 145,478     20.9 %
                                 

(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 first quarter 2017, a $169 million tax benefit was recognized resulting from the revaluation of certain Switzerland deferred tax assets. The revaluation is due to the Company’s election in February 2017 to align certain Switzerland corporate tax positions with international tax initiatives. In the fourth quarter 2017, an additional $11 million benefit was recognized as a result of this Switzerland election. These impacts during the transitional period following the election are not reflective of current income tax expense incurred and therefore affect period-to-period comparability.

(3) Following adoption in fiscal 2017 of Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), the Company may periodically incur tax expense resulting from stock options and stock appreciation rights (SARs) expiring unexercised. New grants of stock options and SARs no longer comprise a significant component of the Company’s compensation arrangements. As the tax expense from expired awards is not related to current period earnings or compensation activities, it has been identified as a pro forma adjustment.

 

The net release of uncertain tax position reserves, amounting to approximately $31.0 million and $17.9 million for the 52-weeks ended December 29, 2018 and December 30, 2017, respectively, have not been included as pro forma adjustments in the above presentation of pro forma income tax provision as such items tend to be more recurring in nature.

Pro forma net income (earnings) per share

Management believes that 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 in order to permit a consistent comparison of the Company’s performance between periods.

                     
Garmin Ltd. And Subsidiaries
Pro Forma Net Income (Earnings) Per Share
(in thousands, except per share information)
                     
      13-Weeks Ended     52-Weeks Ended
      December 29,   December 30,     December 29,   December 30,
        2018       2017         2018       2017  
                     
Net income (GAAP)     $ 190,150     $ 142,550       $ 694,080     $ 709,007  
Foreign currency gains / losses(1)       4,211       8,772         7,616       22,579  
Tax effect of foreign currency gains / losses(2)       (758 )     (1,799 )       (1,195 )     (4,712 )
Pro forma discrete tax items(3)       -       4,066         -       (157,414 )
Net income (Pro Forma)     $ 193,603     $ 153,589       $ 700,501     $ 569,460  
                     
Net income per share (GAAP):                    
Basic     $ 1.01     $ 0.76       $ 3.68     $ 3.77  
Diluted     $ 1.00     $ 0.75       $ 3.66     $ 3.76  
                     
Net income per share (Pro Forma):                    
Basic     $ 1.03     $ 0.82       $ 3.71     $ 3.03  
Diluted     $ 1.02     $ 0.81       $ 3.69     $ 3.02  
                     
Weighted average common shares outstanding:                    
Basic       188,878       187,607         188,635       187,828  
Diluted       190,177       188,915         189,734       188,732  
                     
(1) The majority of the Company’s consolidated foreign currency gains and losses are driven by movements in the Taiwan Dollar, Euro, and British Pound Sterling 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 one of the Company’s subsidiaries. However, there is minimal cash impact from such foreign currency gains and losses.
(2) The tax effect of foreign currency gains and losses was calculated using the effective tax rate of 18.0% and 15.7% for the quarter and year-to-date ended December 29, 2018, respectively, and a pro forma effective tax rate of 20.5% and 20.9% for the quarter and year-to-date ended December 30, 2017, respectively.
(3) The discrete tax items are discussed in the pro forma effective tax rate section above.
 

Free cash flow

Management believes that free cash flow is an important financial 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 that excluding purchases of property and equipment provides a better understanding of the underlying trends in the Company’s operating performance and allows more accurate comparisons of the Company’s operating results to historical performance. 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.

                     
Garmin Ltd. And Subsidiaries
Free Cash Flow
(in thousands)
                     
      13-Weeks Ended     52-Weeks Ended
      December 29,   December 30,     December 29,   December 30,
      2018   2017     2018   2017
                     
Net cash provided by operating activities     $ 217,737   $ 198,265     $ 919,520   $ 660,842
Less: purchases of property and equipment     (32,909)   (54,484)     (155,755)   (139,696)
Free Cash Flow     $ 184,828   $ 143,781     $ 763,765   $ 521,146
                     

Forward-looking Financial Measures

The forward-looking financial measures in our 2019 guidance provided above do not consider the potential effect of certain discrete tax items, foreign currency exchange gains and losses, and any other impacts that may be identified as pro forma adjustments in calculating the non-GAAP measures described above. At this time management is unable to determine whether or not significant discrete tax items will occur in fiscal 2019, reasonably estimate such foreign currency gains and losses, or anticipate the impact of any other events that may be considered in the calculation of non-GAAP financial measures.

Contacts

Investor Relations Contact:
Teri Seck
913/397-8200
investor.relations@garmin.com

Media Relations Contact:
Carly Hysell
913/397-8200
media.relations@garmin.com