Thu, May 07, 2009
Reduced A/C Deliveries May Have Contributed Nearly A Third Less
It's tough out there... and that should be no surprise to
anyone reading Aero-News for the last several months. The down
market for aviation has translated into a significant drop in
Aero-Income for industry heavyweight Garmin who has just published
their First Quarter Sales Figures for 2009... and are probably none
too happy about it all.
According to the statement issued in the course of various
required public disclosures, Garmin reports that their aviation
revenues decreased 31% to $59 million in the First Quarter of 2009.
A number of other industry segments were similarly affected,
including automotive and marine sales. Overall, the company
reported a total decease in revenues of 34%... translating to some
$437 million this quarter... well under the $664 million reported
this time last year.
An Executive Overview authored by Dr. Min Kao, Chairman and
Chief Executive Officer, explained that, "Our aviation and marine
segments also struggled in the quarter as both industries face
significant challenges in 2009. In the aviation segment, we will
focus on stabilizing our sales and margins in this business and
continuing to gain market share through certification of our G1000
and penetration of the G600 as a retrofit solution. On the marine
front, we did see a sequential increase as the marine season
approaches but this seasonal increase was not at a level
experienced in the past. We continue to gain market share as an OEM
partner but these gains are not enough to offset the industry-wide
declines. Again, we will focus our efforts on gaining market share
and bringing to bear the most innovative products in both of these
segments so we are well-positioned for growth when the industries
begin to recover."
A financial overview from Kevin Rauckman, Chief Financial
Officer, added that "Gross margin for the overall business remained
stronger than we had anticipated at 45% as the lower margin
auto/mobile segment contributed less revenue in the quarter. The
auto/mobile segment margin fell to 32% when compared to 43% in the
first quarter of 2008, as the average selling price was negatively
impacted by price protection credits offered to our retail partners
and significant channel inventory reductions. This was offset by
increasing gross margins in our aviation, outdoor/fitness and
marine segments due to improved product mix and steady pricing.
Outdoor/fitness margins improved most dramatically to 61% in first
quarter compared to 53% in the year-ago quarter, while aviation
improved 500 basis points to 69%."
The filing also noted that one of the Business Highlights of
1Q/2009 included their achieving, "supplemental type certification
and began initial shipments of the G1000 avionics suite on the King
Air 200 and B200."
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