Edgar Filing: GARMIN LTD

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 28, 2008

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

Commission file number 0-31983

________________

GARMIN LTD.

(Exact name of Company as specified in its charter)

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

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

No Changes

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

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

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

Large Accelerated Filer þ Accelerated Filer o Non-accelerated Filer o

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

Number of shares outstanding of the Company's common shares as of August 1, 2008

Common Shares, $.005 par value: 207,269,130

Garmin Ltd.

Form 10-Q

Quarter Ended June 28, 2008

Table of Contents

			Page
Part I - Financial Information

	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3

		Introductory Comments	3

		Condensed Consolidated Balance Sheets at June 28, 2008 and December 29, 2007	4

		Condensed Consolidated Statements of Income for the 13-weeks and 26-weeks ended June 28, 2008 and June 30, 2007	5

		Condensed Consolidated Statements of Cash Flows for the 26-weeks ended June 28, 2008 and June 30, 2007	6

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

	Item 4.	Controls and Procedures	25

Part II - Other Information

	Item 1.	Legal Proceedings	26

		Item 1A. Risk Factors	27

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

	Item 3.	Defaults Upon Senior Securities	27

	Item 4.	Submission of Matters to a Vote of Securities Holders	28

	Item 5.	Other Information	28

	Item 6.	Exhibits	29

Signature Page			30

Index to Exhibits			31

Garmin Ltd.

Form 10-Q

Quarter Ended June 28, 2008

Part I – Financial Information

Item 1. Condensed Consolidated Financial Statements (Unaudited)

Introductory Comments

The Condensed Consolidated Financial Statements of Garmin Ltd. ("Garmin" or the "Company") included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to enable a reasonable understanding of the information presented. These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 29, 2007. Additionally, the Condensed Consolidated Financial Statements should be read in conjunction with Item 2 of Management's Discussion and Analysis of Financial Condition and Results of Operations, included in this Form 10-Q.

The results of operations for the 13-week and 26-week periods ended June 28, 2008 are not necessarily indicative of the results to be expected for the full year 2008.

Garmin Ltd. And Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share information)

	(Unaudited)
	June 28,		December 29,
	2008		2007
Assets
Current assets:
Cash and cash equivalents	$	624,482	$	707,689
Marketable securities		36,335		37,551
Accounts receivable, net		679,789		952,513
Inventories, net		656,018		505,467
Deferred income taxes		93,235		107,376
Prepaid expenses and other current assets		27,712		22,179

Total current assets		2,117,571		2,332,775

Property and equipment, net		449,727		374,147

Marketable securities		348,997		386,954
Restricted cash		1,550		1,554
Licensing agreements, net		3,863		14,672
Other intangible assets, net		210,323		181,358

Total assets	$	3,132,031	$	3,291,460

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	179,212	$	341,053
Salaries and benefits payable		35,081		31,696
Accrued warranty costs		83,918		71,636
Other accrued expenses		166,655		280,603
Income taxes payable		51,104		76,895
Dividend payable		157,498		-

Total current liabilities		673,468		801,883

Deferred income taxes		11,748		11,935
Non-current taxes		136,137		126,593
Other liabilities		1,025		435

Stockholders' equity:
Common stock, $0.005 par value, 1,000,000,000 shares authorized:
Issued and outstanding shares - 210,648,000 as of June 28, 2008 and 216,980,000 as of December 29, 2007		1,054		1,086
Additional paid-in capital		-		132,264
Retained earnings		2,258,730		2,171,134
Accumulated other comprehensive income		49,869		46,130

Total stockholders' equity		2,309,653		2,350,614
Total liabilities and stockholders' equity	$	3,132,031	$	3,291,460

See accompanying notes.

Garmin Ltd. And Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(In thousands, except per share information)

	13-Weeks Ended					26-Weeks Ended
	June 28,		June 30,			June 28,		June 30,
	2008		2007			2008		2007

Net sales	$	911,671	$	742,466		$	1,575,476	$	1,234,625

Cost of goods sold		494,543		367,799			838,233		622,206

Gross profit		417,128		374,667			737,243		612,419

Selling, general and administrative expense		125,028		95,373			222,853		161,297
Research and development expense		53,597		37,727			103,154		71,230
		178,625		133,100			326,007		232,527

Operating income		238,503		241,567			411,236		379,892

Other income (expense):
Interest income		9,656		10,841			18,060		20,199
Foreign currency		21,561		(6,086	)		17,562		7,119
Gain on sale of equity securities		45,686		-			50,949		-
Other		757		315			799		334
		77,660		5,070			87,370		27,652

Income before income taxes		316,163		246,637			498,606		407,544

Income tax provision		60,071		32,260			94,735		53,307

Net income	$	256,092	$	214,377		$	403,871	$	354,237

Net income per share:
Basic	$	1.20	$	0.99		$	1.88	$	1.64
Diluted	$	1.19	$	0.98		$	1.86	$	1.62

Weighted average common shares outstanding:
Basic		213,756		216,380			215,130		216,298
Diluted		215,572		219,078			217,274		218,925

See accompanying notes.

Garmin Ltd. And Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	26-Weeks Ended
	June 28,			June 30,
	2008			2007
Operating Activities:
Net income	$	403,871		$	354,237
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		18,690			13,479
Amortization		8,430			15,856
Loss (gain) on sale of property and equipment		(208	)		18
Provision for doubtful accounts		3,977			1,808
Deferred income taxes		17,342			(725	)
Foreign currency transaction gains/losses		25,428			(10,358	)
Provision for obsolete and slow moving inventories		28,326			17,309
Stock compensation expense		18,253			7,196
Realized gains on marketable securities		(72,445	)		-
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		307,580			(88,405	)
Inventories		(141,180	)		(33,406	)
Other current assets		8,110			9,059
Accounts payable		(213,507	)		63,472
Other current and non-current liabilities		(102,909	)		101,826
Income taxes payable		(25,341	)		(6,937	)
Purchase of licenses		(4,236	)		(22,290	)
Net cash provided by operating activities		280,181			422,139

Investing activities:
Purchases of property and equipment		(79,917	)		(112,020	)
Proceeds from sale of property and equipment		8			-
Purchase of intangible assets		(997	)		(1,881	)
Purchase of marketable securities		(344,119	)		(378,909	)
Redemption of marketable securities		390,179			455,598
Change in restricted cash		14			(33	)
Acquisitions, net of cash acquired		(34,768	)		(68,902	)
Net cash used in investing activities		(69,600	)		(106,147	)

Financing activities:
Proceeds from issuance of common stock		7,194			7,534
Stock repurchase		(318,471	)		-
Payments on long term debt		-			(248	)
Tax benefit related to stock option exercise		1,965			7,360
Net cash (used in)/provided by financing activities		(309,312	)		14,646

Effect of exchange rate changes on cash and cash equivalents		15,524			(288	)

Net (decrease)/increase in cash and cash equivalents		(83,207	)		330,350
Cash and cash equivalents at beginning of period		707,689			337,321
Cash and cash equivalents at end of period	$	624,482		$	667,671

See accompanying notes.

Garmin Ltd. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 28, 2008

(In thousands, except share and per share information)

1.	Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the 13-week and 26-week periods ended June 28, 2008 are not necessarily indicative of the results that may be expected for the year ending December 27, 2008.

The condensed consolidated balance sheet at December 29, 2007 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 29, 2007.

The Company’s fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year. Therefore the financial results of certain fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13-weeks. The quarters ended June 28, 2008 and June 30, 2007 both contain operating results for 13-weeks for both quarter-to-date periods.

2.	Inventories

The components of inventories consist of the following:

	June 28, 2008			December 29, 2007

Raw Materials	$	173,205		$	130,056
Work-in-process		56,628			57,622
Finished goods		458,197			343,670
Inventory Reserves		(32,012	)		(25,881	)
Inventory, net of reserves	$	656,018		$	505,467

3. Stock Purchase Plan

The Board of Directors approved a share repurchase program on February 4, 2008, authorizing the Company to purchase up to 5,000,000 shares of Garmin Ltd.’s common stock as market and business conditions warrant. The Company had repurchased 1,425,000 in first quarter 2008. As of June 28, 2008, the Company had repurchased the remaining 3,575,000 shares using cash of $158,317.

On June 6, 2008 the Board of Directors approved a share repurchase program authorizing the Company to repurchase up to 10,000,000 common shares of Garmin Ltd. and that it had adopted a Rule 10b5-1 plan covering 5,000,000 of such shares. The repurchases may be made from time to time as market and business conditions warrant on the open market or in negotiated transactions in compliance with the SEC’s Rule 10b-18. The timing and amounts of any repurchases will be determined by the company’s management depending on market conditions and other factors including price, regulatory requirements and capital availability. The program does not require the purchase of any minimum number of shares and may be suspended or discontinued at any time. The share repurchase authorization expires on December 31, 2009. As of June 28, 2008, the Company had repurchased 1,600,000 shares using cash of $70,098.

4.	Earnings Per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share information):

	13-Weeks Ended
	June 28,		June 30,
	2008		2007
Numerator:
Numerator for basic and diluted net income per share - net income	$	256,092	$	214,377

Denominator:
Denominator for basic net income per share – weighted-average common shares		213,756		216,380

Effect of dilutive securities – employee stock options and stock appreciation rights		1,816		2,698

Denominator for diluted net income per share – adjusted weighted-average common shares		215,572		219,078

Basic net income per share	$	1.20	$	0.99

Diluted net income per share	$	1.19	$	0.98

	26-Weeks Ended
	June 28,		June 30,
	2008		2007
Numerator:
Numerator for basic and diluted net income per share - net income	$	403,871	$	354,237

Denominator:
Denominator for basic net income per share – weighted-average common shares		215,130		216,298

Effect of dilutive securities – employee stock options and stock appreciation rights		2,143		2,627

Denominator for diluted net income per share – adjusted weighted-average common shares		217,274		218,925

Basic net income per share	$	1.88	$	1.64

Diluted net income per share	$	1.86	$	1.62

There were 5,408,834 anti-dilutive options for the 13-week period ended June 28, 2008. There were 2,706,424 anti-dilutive options for the 13-week period ended June 30, 2007.

There were 5,049,164 anti-dilutive options for the 26-week period ended June 28, 2008. There were 2,561,684 anti-dilutive options for the 26-week period ended June 30, 2007.

There were 36,877 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended June 28, 2008.

There were 129,710 shares issued as a result of exercises of stock appreciation rights and stock options for the 26-week period ended June 28, 2008.

On June 6, 2008, the Company’s Board of Directors approved an annual cash dividend of $0.75 per share. The dividend is payable to shareholders of record on December 1, 2008 and will be paid on December 15, 2008.

5.	Comprehensive Income

Comprehensive income is comprised of the following (in thousands):

	13-Weeks Ended
	June 28,			June 30,
	2008			2007
Net income	$	256,092		$	214,377
Translation adjustment		(18,790	)		2,345
Change in fair value of available-for-sale marketable securities, net of deferred taxes		(24,291	)		(538	)
Comprehensive income	$	213,011		$	216,184

	26-Weeks Ended
	June 28,			June 30,
	2008			2007
Net income	$	403,871		$	354,237
Translation adjustment		61,004			(10,537	)
Change in fair value of available-for-sale marketable securities, net of deferred taxes		(57,265	)		1,280
Comprehensive income	$	407,610		$	344,980

6.	Segment Information

Net sales, operating income, and income before taxes for each of the Company’s reportable segments are presented below:

Garmin Ltd. And Subsidiaries

Revenue, Gross Profit, and Operating Income by Segment

	Reportable Segments
	Outdoor/				Auto/
	Fitness		Marine		Mobile		Aviation		Total
13-Weeks Ended June 28, 2008

Net sales	$	119,147	$	71,178	$	631,883	$	89,463	$	911,671
Operating income	$	45,445	$	24,068	$	129,190	$	39,800	$	238,503
Income before taxes	$	55,302	$	27,905	$	191,855	$	41,101	$	316,163

13-Weeks Ended June 30, 2007

Net sales	$	77,163	$	79,771	$	507,895	$	77,637	$	742,466
Operating income	$	28,600	$	33,115	$	149,067	$	30,785	$	241,567
Income before taxes	$	28,812	$	34,065	$	153,109	$	30,651	$	246,637

26-Weeks Ended June 28, 2008

Net sales	$	189,641	$	127,185	$	1,083,742	$	174,908	$	1,575,476
Operating income	$	64,756	$	41,904	$	236,831	$	67,745	$	411,236
Income before taxes	$	75,749	$	47,238	$	304,159	$	71,460	$	498,606

26-Weeks Ended June 30, 2007

Net sales	$	137,690	$	122,775	$	824,520	$	149,640	$	1,234,625
Operating income	$	49,809	$	44,410	$	228,591	$	57,082	$	379,892
Income before taxes	$	53,595	$	47,150	$	248,253	$	58,546	$	407,544

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

Net Sales and long-lived assets (property and equipment) by geographic area are as follows as of and for the 26-week periods ended June 28, 2008 and June 30, 2007:

	North
	America		Asia		Europe		Total
June 28, 2008
Net sales to external customers	$	987,440	$	70,685	$	517,351	$	1,575,476
Long lived assets	$	209,481	$	184,041	$	56,205	$	449,727

June 30, 2007
Net sales to external customers	$	777,515	$	52,474	$	404,636	$	1,234,625
Long lived assets	$	162,536	$	143,819	$	43,944	$	350,299

7.	Warranty Reserves

The Company’s products sold are generally covered by a warranty for periods ranging from one to three years. The Company’s estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet. The following reconciliation provides an illustration of changes in the aggregate warranty reserve.

	13-Weeks Ended
	June 28,			June 30,
	2008			2007

Balance - beginning of the period	$	72,751		$	39,281
Accrual for products sold
during the period		37,666			22,565
Expenditures		(26,499	)		(12,121	)
Balance - end of the period	$	83,918		$	49,725

	26-Weeks Ended
	June 28,			June 30,
	2008			2007

Balance - beginning of the period	$	71,636		$	37,639
Accrual for products sold
during the period		72,987			37,600
Expenditures		(60,705	)		(25,514	)
Balance - end of the period	$	83,918		$	49,725

8.	Commitments

Pursuant to certain supply agreements, the Company is contractually committed to make purchases of approximately $28.2 million over the next 3 years.

9.	Income Taxes

Our earnings before taxes increased 28.2% when compared to the same quarter in 2007, and our income tax expense increased by $27.8 million, to $60.1 million, for the 13-week period ended June 28, 2008, from $32.3 million for the 13-week period ended June 30, 2007, due to our earnings before taxes growth and a higher effective tax rate. The effective tax rate was 19.0% for both the 13-weeks and 26-weeks ended June 28, 2008 compared to13.1% for both the 13-weeks and 26-weeks ended June 30, 2007. The higher tax rate in 2008 when compared to 2007 was driven by a change in tax law related to the repatriation of earnings from our Taiwan subsidiary and the unfavorable mix of taxable income among Company entities.

10.

Recent Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company adopted SFAS No. 157 effective December 30, 2007.

SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). SFAS No. 157 classifies the inputs used to measure fair value into the following hierarchy:

Level 1 Unadjusted quoted prices in active markets for identical assets or liability

Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or

Unadjusted quoted prices for identical or similar assets

Level 3 Unobservable inputs for the asset or liability

The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Assets and liabilities measured at estimated fair value on a recurring basis are summarized below:

	Fair Value Measurements as of June 28, 2008
	Total		Level 1		Level 2		Level 3
Description

Available for-sale securites	$	299,863	$	299,863		-		-
Failed Auction rate securities		85,469		-		-		85,469

Total	$	385,332	$	299,863	$	-	$	85,469

For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, SFAS No. 157 requires a reconciliation of the beginning and ending balances, separately for each major category of assets. The reconciliation is as follows:

	Fair Value Measurements Using
	Significant Unobservable Inputs (Level 3)
	13-Weeks Ended			26-Weeks Ended
	June 28, 2008			June 28, 2008
Beginning balance of auction rate securities	$	88,208		$	0
Total unrealized losses included in other comprehensive income		(2,739	)		(7,381	)
Purchases in and/or out of Level 3		-			92,850
Transfers in and/or out of Level 3		-			-
Ending balance of auction rate securities	$	85,469		$	85,469

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”). SFAS 160 outlines the accounting and reporting for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. The statement is effective for fiscal years beginning on or after December 15, 2008. We do not expect the adoption of SFAS No. 160 to have a material impact on our financial reporting and disclosure.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141R”). This standard establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements that will enable users to evaluate the nature and financial effects of the business combination. The statement is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and interim periods within those fiscal years. The Company will determine the impact of adopting SFAS 141R on its consolidated financial statements should applicable transactions occur in the future.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”). This statement will require holders of derivative instruments to provide qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses from derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. This statement is effective for interim and annual periods beginning after November 15, 2008. The company is not currently the holder of any derivative instruments; thus, currently adoption of this statement would not have any effect on the Company’s results of operations, financial condition, or cash flows.

11.

Acquisitions

In the second quarter of 2008, Garmin Ltd. acquired Formar Electronics N.V./S.A. (the distributor of Garmin’s consumer products in Belgium and Luxembourg). The company has been renamed Garmin Belux N.V./S.A. The acquisition is not considered to be material; therefore supplemental pro forma information is not presented.

On May 1, 2008, Garmin Ltd. announced its intent to acquire Satsignal Equipamentos de Comunicações e de Navegação S.A., the distributor of Garmin’s consumer products in Portugal. This acquisition is not expected to be material.

12.

Subsequent Events

On June 30, 2008, the acquisition of NavCor Oy, the distributor of Garmin’s consumer products in Finland, was completed and the distributor has been renamed Garmin Suomi Oy. This acquisition is not material; therefore supplemental pro forma information will not be presented.

On July 31, 2008, the acquisition of Puls Elektronik GmbH, the distributor of Garmin’s consumer products in Austria, was completed and the distributor is expected to be renamed Garmin Austria GmbH. This acquisition is not material; therefore supplemental pro forma information will not be presented.

Subsequent to June 28, 2008, the Company repurchased the remaining 3,400,000 shares pursuant to the Rule 10b5-1 plan adopted on June 6, 2008. This leaves an additional 5,000,000 shares to be repurchased as market and business conditions warrant.

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

The discussion set forth below, as well as other portions of this Quarterly Report, contains statements concerning potential future events. Such forward-looking statements are based upon assumptions by our management, as of the date of this Quarterly Report, including assumptions about risks and uncertainties faced by the Company. Readers can identify these forward-looking statements by their use of such verbs as expects, anticipates, believes or similar verbs or conjugations of such verbs. If any of our assumptions prove incorrect or should unanticipated circumstances arise, our actual results could materially differ from those anticipated by such forward-looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited to, those factors identified in the Company’s Annual Report on Form 10-K for the year ended December 29, 2007. This report has been filed with the Securities and Exchange Commission (the "SEC" or the "Commission") in Washington, D.C. and can be obtained by contacting the SEC's public reference operations or obtaining it through the SEC's web site on the World Wide Web at http://www.sec.gov. Readers are strongly encouraged to consider those factors when evaluating any forward-looking statement concerning the Company. The Company will not update any forward-looking statements in this Quarterly Report to reflect future events or developments.

The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in this Form 10-Q and the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 29, 2007.

The Company is a leading worldwide provider of navigation, communications and information devices, most of which are enabled by Global Positioning System, or GPS, technology. We operate in four business segments, the outdoor/fitness, marine, automotive/mobile and aviation markets. Our segments offer products through our network of independent dealers and distributors. However, the nature of products and types of customers for the four segments may vary significantly. As such, the segments are managed separately.

Results of Operations

The following table sets forth our results of operations as a percentage of net sales during the periods shown:

	13-Weeks Ended
	June 28, 2008			June 30, 2007

Net sales		100.0	%		100.0	%
Cost of goods sold		54.2	%		49.5	%
Gross profit		45.8	%		50.5	%
Research and development		5.9	%		5.1	%
Selling, general and administrative		13.7	%		12.8	%
Total operating expenses		19.6	%		17.9	%
Operating income		26.2	%		32.6	%
Other income (expense), net		8.5	%		0.6	%
Income before income taxes		34.7	%		33.2	%
Provision for income taxes		6.6	%		4.3	%
Net income		28.1	%		28.9	%

	26-Weeks Ended
	June 28, 2008			June 30, 2007

Net sales		100.0	%		100.0	%
Cost of goods sold		53.2	%		50.4	%
Gross profit		46.8	%		49.6	%
Research and development		6.6	%		5.8	%
Selling, general and administrative		14.1	%		13.0	%
Total operating expenses		20.7	%		18.8	%
Operating income		26.1	%		30.8	%
Other income (expense), net		5.5	%		2.2	%
Income before income taxes		31.6	%		33.0	%
Provision for income taxes		6.0	%		4.3	%
Net income		25.6	%		28.7	%

The company manages its operations in four segments: outdoor/fitness, marine, automotive/mobile, and aviation, and each of its segments employs the same accounting policies. Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis. The following table sets forth our results of operations (in thousands) including revenue, gross profit, and operating profit for each of our four segments during the periods shown. For each line item in the table, the total of the outdoor/fitness, marine, automotive/mobile, and aviation segments' amounts equals the amount in the condensed consolidated statements of income included in Item 1.

	Reporting Segments
	Outdoor/				Auto/
	Fitness		Marine		Mobile		Aviation		Total

13-Weeks Ended June 28, 2008

Net sales	$	119,147	$	71,178	$	631,883	$	89,463	$	911,671
Gross profit	$	67,908	$	40,120	$	243,720	$	65,380	$	417,128
Operating income	$	45,445	$	24,068	$	129,190	$	39,800	$	238,503

13-Weeks Ended June 30, 2007

Net sales	$	77,163	$	79,771	$	507,895	$	77,637	$	742,466
Gross profit	$	43,648	$	46,381	$	233,520	$	51,118	$	374,667
Operating income	$	28,600	$	33,115	$	149,067	$	30,785	$	241,567

26-Weeks Ended June 28, 2008

Net sales	$	189,641	$	127,185	$	1,083,742	$	174,908	$	1,575,476
Gross profit	$	105,347	$	72,583	$	439,614	$	119,699	$	737,243
Operating income	$	64,756	$	41,904	$	236,831	$	67,745	$	411,236

26-Weeks Ended June 30, 2007

Net sales	$	137,690	$	122,775	$	824,520	$	149,640	$	1,234,625
Gross profit	$	77,063	$	67,534	$	370,251	$	97,571	$	612,419
Operating income	$	49,809	$	44,410	$	228,591	$	57,082	$	379,892

Comparison of 13-Weeks Ended June 28, 2008 and June 30, 2007

Net Sales

	13-weeks ended June 28, 2008					13-weeks ended June 30, 2007					Quarter over Quarter
	Net Sales		% of Revenues			Net Sales		% of Revenues			$ Change			% Change
Outdoor/Fitness	$	119,147		13.1	%	$	77,163		10.4	%	$	41,984			54.4	%
Marine		71,178		7.8	%		79,771		10.7	%		(8,593	)		-10.8	%
Automotive/Mobile		631,883		69.3	%		507,895		68.4	%		123,988			24.4	%
Aviation		89,463		9.8	%		77,637		10.5	%		11,826			15.2	%
Total	$	911,671		100.0	%	$	742,466		100.0	%	$	169,205			22.8	%

Increases in sales for the 13-week period ended June 28, 2008 were primarily due to a strong response to automotive and outdoor/fitness product offerings. Aviation revenues also grew but marine revenues declined on a year-over-year basis. Automotive/mobile revenue remains a significantly larger portion of our revenue mix, rising from 68.4% in the second quarter of 2007 to 69.3% in the second quarter of 2008.

Total unit sales increased 54% to 3,920,000 in the second quarter of 2008 from 2,544,000 in the second quarter of 2007. The higher unit sales volume in the second quarter of fiscal 2008 was primarily attributable to strong sales of automotive products during the seasonally higher second quarter, although unit growth was also strong in the outdoor/fitness segment due to new product offerings.

Automotive/mobile segment revenue grew 24.4% from the year-ago quarter, on the strength of nüvi and other personal navigation devices (PNDs). Revenues in our outdoor/fitness segment grew the fastest due to the introduction of the Colorado™ series, the Forerunner^® 405 and Edge^®705. Our aviation segment also performed well with 15.2% growth from the year ago quarter. Growth in this segment is primarily driven by the demand for the G1000 in the OEM market and additional traction of our flight control products. The marine segment slowed during the quarter when compared with the strong second quarter of 2007 when many new products were introduced. The decline is primarily related to less consumer spending in the marine industry due to macroeconomic conditions and fuel prices.

Gross Profit

	13-weeks ended June 28, 2008					13-weeks ended June 30, 2007					Quarter over Quarter
	Gross Profit		% of Revenues			Gross Profit		% of Revenues			$ Change			% Change
Outdoor/Fitness	$	67,908		57.0	%	$	43,648		56.6	%	$	24,260			55.6	%
Marine	$	40,120		56.4	%		46,381		58.1	%		(6,261	)		-13.5	%
Automotive/Mobile	$	243,720		38.6	%		233,520		46.0	%		10,200			4.4	%
Aviation	$	65,380		73.1	%		51,118		65.8	%		14,262			27.9	%
Total	$	417,128		45.8	%	$	374,667		50.5	%	$	42,461			11.3	%

Gross profit dollars in the second quarter of 2008 grew 11.3% while gross profit margin percentage decreased 470 basis points over the second quarter of 2007. Second quarter gross profit margins increased to 57.0%, and 73.1% in the outdoor/fitness and aviation segments respectively, when compared to the second quarter of 2007. Second quarter 2008 gross profit margins decreased to 56.4% and 38.6% in the marine and automotive/mobile segment respectively, when compared with the second quarter of 2007.

Gross profit margin percentage for the Company overall decreased primarily as a result of the automotive/mobile segment remaining a significantly larger percentage of the Company’s product mix during a quarter when this segment’s margin fell by 740 basis points. The automotive/mobile segment is by nature a lower-margin business and the Company has begun to see the impacts expected on gross margin due to falling prices and a product mix shift toward lower end PNDs. Foreign currency fluctuations resulted in 100 basis points of gross margin favorability as the Company benefited from sales transacted in foreign currencies. Release of new products into the outdoor/fitness segment drove strong year-over-year improvement in outdoor/fitness margins. Declines in gross margin in the marine segment occurred as a result of more mature products. The aviation segment saw a 730 basis point increase in gross margin due to growth in OEM sales in the quarter. Aviation continued to be the Company’s highest gross margin segment.

Selling, General and Administrative Expenses

	13-weeks ended June 28, 2008					13-weeks ended June 30, 2007					Quarter over Quarter
	Selling, General &					Selling, General &
	Admin. Expenses		% of Revenues			Admin. Expenses		% of Revenues			$ Change		% Change
Outdoor/Fitness	$	15,833		13.3	%	$	9,310		12.1	%	$	6,523		70.1	%
Marine	$	11,215		15.8	%		8,748		11.0	%		2,467		28.2	%
Automotive/Mobile	$	91,149		14.4	%		71,445		14.1	%		19,704		27.6	%
Aviation	$	6,831		7.6	%		5,870		7.6	%		961		16.4	%
Total	$	125,028		13.7	%	$	95,373		12.8	%	$	29,655		31.1	%

The increase in selling, general and administrative expense was driven primarily by costs associated with the European distributors acquired in 2007 and 2008, increased staffing throughout the organization to support our growth and increased advertising spending. Other selling, general and administrative expenses increased as a percent of sales from 5.2% of sales in the second quarter of 2007 to 7.3% of sales in the second quarter of 2008, as global staffing in marketing and administration were increased to support our rapid growth. In absolute dollars, other selling, general and administrative expenses increased $28.2 million when compared to the previous year quarter, with increases distributed across European distributors, information technology, call center, operations, finance, administration, and marketing administration areas to support the growth of our businesses. Advertising spending, while up $1.5 million in absolute dollars, declined as a percent of revenues, to 6.4% of revenues compared to 7.7% of revenues in the second quarter of 2007.

Research and Development Expense

	13-weeks ended June 28, 2008					13-weeks ended June 30, 2007					Quarter over Quarter
	Research &					Research &
	Development		% of Revenues			Development		% of Revenues			$ Change		% Change
Outdoor/Fitness	$	6,631		5.6	%	$	5,738		7.4	%	$	893		15.6	%
Marine		4,836		6.8	%		4,518		5.7	%		318		7.0	%
Automotive/Mobile		23,381		3.7	%		13,008		2.6	%		10,373		79.7	%
Aviation		18,749		21.0	%		14,463		18.6	%		4,286		29.6	%
Total	$	53,597		5.9	%	$	37,727		5.1	%	$	15,870		42.1	%

The 42.1% increase in research and development expense was due to ongoing development activities for new products, the addition of almost 300 new engineering personnel to our staff during the quarter, and an increase in engineering program costs during the second quarter of 2008 as a result of our continued emphasis on product innovation. Research and development costs increased $15.9 million when compared with the second quarter of 2007 representing an 80 basis point increase as a percent of revenue.

Operating Income

	13-weeks ended June 28, 2008					13-weeks ended June 30, 2007					Quarter over Quarter
	Operating Income		% of Revenues			Operating Income		% of Revenues			$ Change			% Change
Outdoor/Fitness	$	45,445		38.1	%	$	28,600		37.1	%	$	16,845			58.9	%
Marine		24,068		33.8	%		33,115		41.5	%		(9,047	)		-27.3	%
Automotive/Mobile		129,190		20.4	%		149,067		29.3	%		(19,877	)		-13.3	%
Aviation		39,800		44.5	%		30,785		39.7	%		9,015			29.3	%
Total	$	238,503		26.2	%	$	241,567		32.5	%	$	($3,064	)		-1.3	%

Operating margin declined 630 basis points as a percent of revenue when compared to the second quarter of 2007 due to the decrease in gross margins, along with the costs associated with the European distributors, increases in staffing to support the growth of our businesses, and research and development expense associated with ongoing development activities. Operating margins decreased to 20.4% and 33.8% within our automotive/mobile and marine segments, respectively, when compared with the second quarter of 2007. Operating margins increased to 38.1% and 44.5% within our outdoor/fitness and aviation segments, respectively, when compared with the second quarter of 2007. Our operating income decreased as a function of the gross profit margin percentage decrease described above, as well as declining operating margins in both the marine and automotive/mobile segments.

Other Income (Expense)

	13-weeks ended		13-weeks ended
	June 28, 2008		June 30, 2007
Interest Income	$	9,656	$	10,841
Foreign Currency Exchange		21,561		(6,086	)
Gain on sale of equity securities		45,686		-
Other		757		315
Total	$	77,660	$	5,070

The average taxable equivalent interest rate of return on invested cash during the second quarter of 2008 was 3.6% compared to 4.4% during the same quarter of 2007. The decrease in interest income is attributable to slightly lower cash balances and decreasing interest rates.

Foreign currency gains and losses for the Company are primarily tied to movements by the Taiwan Dollar, the Euro, and the British Pound Sterling. The U.S. Dollar remains the functional currency of Garmin (Europe) Ltd. The Euro is the functional currency of Garmin France, Garmin Deutschland, Garmin Iberia, Garmin Italia, and Garmin Belux. As these entities grow, Euro currency moves will generate material gains and losses. Additionally, Euro-based inter-company transactions can also generate currency gains and losses. The Canadian dollar and Danish Krone are the functional currency of Dynastream Innovations, Inc. and Garmin Danmark, respectively; due to these entities’ relative size, currency moves do not have a material impact on the Company’s financial statements.

The majority of the $21.6 million currency gain in the second quarter of 2008 was related to the tender of our Tele Atlas N.V. shares. This transaction generated a realized gain of $20.4 million due to the strengthening of the Euro between the date of purchase of the shares in October 2007 to the date of tender in June 2008.

The majority of the $6.1 million currency loss in the second quarter of 2007 was due to the weakening of the U.S. Dollar compared to the Taiwan Dollar. During the second quarter of fiscal 2007 the exchange rate decreased 0.7% to $32.86 TD/USD at June 30, 2007 from $33.09 TD/USD at March 31, 2007, resulting in $5.8 million of the quarter’s loss. While the British Pound Sterling strengthened relative to the U.S. Dollar during the quarter, the timing of transactions during the period resulted in Garmin Europe recording a $0.6 million gain.

Other income of $46.3 million in the current quarter was primarily generated from the sale of our equity interest in Tele Atlas N.V.

Income Tax Provision

Our earnings before taxes increased 28.2% when compared to the second quarter of 2007, and our income tax expense increased by $27.8 million, to $60.1 million, for the 13-week period ended June 28, 2008, from $32.3 million for the 13-week period ended June 30, 2007, due to our earnings before taxes growth and a higher effective tax rate. The effective tax rate was 19.0% in the second quarter of 2008 and 13.1% in the second quarter of 2007. The higher tax rate in the second quarter of 2008 when compared to the same quarter in 2007 was driven by a change in tax law related to the repatriation of earnings from our Taiwan subsidiary and the unfavorable mix of taxable income among Company entities.

Net Income

As a result of the above, net income increased 19.5% for the 13-week period ended June 28, 2008 to $256.1 million compared to $214.4 million for the 13-week period ended June 30, 2007.

Comparison of 26-Weeks Ended June 28, 2008 and June 30, 2007

Net Sales

	26-weeks ended June 28, 2008					26-weeks ended June 30, 2007					Quarter over Quarter
	Net Sales		% of Revenues			Net Sales		% of Revenues			$ Change		% Change
Outdoor/Fitness	$	189,641		12.0	%	$	137,690		11.2	%	$	51,951		37.7	%
Marine		127,185		8.1	%		122,775		9.9	%		4,410		3.6	%
Automotive/Mobile		1,083,742		68.8	%		824,520		66.8	%		259,222		31.4	%
Aviation		174,908		11.1	%		149,640		12.1	%		25,268		16.9	%
Total	$	1,575,476		100.0	%	$	1,234,625		100.0	%	$	340,851		27.6	%

Increases in sales for the 26-week period ended June 28, 2008 were due to a strong response to automotive, outdoor/fitness product offerings. Automotive/mobile revenue remains a significantly larger portion of our revenue mix, rising from 66.8% in the first half of 2007 to 68.8% in the first half of 2008.

Total unit sales increased 64% to 6,707,000 in the first half of 2008 from 4,095,000 in the same period of 2007. The higher unit sales volume in the first half of fiscal 2008 was primarily attributable to strong sales of automotive products, particularly in North America, and outdoor/fitness products.

Automotive/mobile segment revenue grew 31.4% from the year-ago period, on the strength of nuvi^® and other personal navigation devices (PNDs). On a percentage basis, revenues in our outdoor/fitness segment grew faster than any other segment in the first half of 2008 due to the introduction of the Colorado™ series, the Forerunner^® 405 and Edge^®705. Our aviation segment continued to perform well on the strength of our G1000 cockpit. Marine revenues were slightly higher in the first half of 2008 compared to the prior year due to strong growth in the first quarter of 2008 offset somewhat by a decline in the second quarter as previously discussed.

Gross Profit

	26-weeks ended June 28, 2008					26-weeks ended June 30, 2007					Quarter over Quarter
	Gross Profit		% of Revenues			Gross Profit		% of Revenues			$ Change		% Change
Outdoor/Fitness	$	105,347		55.6	%	$	77,063		56.0	%	$	28,284		36.7	%
Marine		72,583		57.1	%		67,534		55.0	%		5,049		7.5	%
Automotive/Mobile		439,614		40.6	%		370,251		44.9	%		69,363		18.7	%
Aviation		119,699		68.4	%		97,571		65.2	%		22,128		22.7	%
Total	$	737,243		46.8	%	$	612,419		49.6	%	$	124,824		20.4	%

Gross profit dollars in the first half of 2008 grew 20.4% and gross profit margin percentage declined 280 basis points over the same period of the previous year. First half gross profit margins decreased to 55.6% and 40.6% in the outdoor/fitness and automotive/mobile segments respectively, when compared to the same period in 2007. First half 2008 gross profit margins increased to 57.1% and 68.4% within the marine and aviation segments, when compared with the first half of 2007.

Gross profit margin percentage for the Company overall decreased 280 basis points primarily as a result of the automotive/mobile segment decline of 430 basis points. The automotive/mobile segment is by nature a lower-margin business and the Company has begun to see the impacts expected on gross margin due to falling prices and a product mix shift toward lower end PNDs. Foreign currency fluctuations resulted in 200 basis points of gross margin favorability as the Company benefited from sales transacted in foreign currencies. Strong demand for the high margin G1000 in the aviation segment resulted in favorable product mix and margins for the aviation segment in the first half of the year. Marine gross margin increased compared to the first half of 2007 as the new products introduced in second quarter of 2007 continue to provide high gross margins. Outdoor/fitness gross margin was relatively stable and remained within historic ranges.

Selling, General and Administrative Expenses

	26-weeks ended June 28, 2008					26-weeks ended June 30, 2007					Quarter over Quarter
	Selling, General &					Selling, General &
	Admin. Expenses		% of Revenues			Admin. Expenses		% of Revenues			$ Change		% Change
Outdoor/Fitness	$	27,762		14.6	%	$	16,599		12.1	%	$	11,163		67.3	%
Marine		20,487		16.1	%		14,785		12.0	%		5,702		38.6	%
Automotive/Mobile		160,178		14.8	%		117,259		14.2	%		42,919		36.6	%
Aviation		14,426		8.2	%		12,654		8.5	%		1,772		14.0	%
Total	$	222,853		14.1	%	$	161,297		13.1	%	$	61,556		38.2	%

The increase in selling, general and administrative expense was driven primarily by costs associated with the European distributors acquired in 2007 and 2008, increased staffing to support our growth and increased advertising spending. Other selling, general and administrative expenses increased as a percent of revenues from 6.1% in the first half of 2007 to 8.0% in the first half of 2008. In absolute dollars, other expenses increased $51.2 million when compared to the same period in 2007, with increases distributed across European distributors, call center, operations, information technology, administration, and marketing administration areas to support the growth of our businesses. Advertising spending, which included increases in cooperative advertising costs and television and print advertising placements, increased 12% or $10.3 million when compared to the first half of 2007. As a percent of revenues, advertising fell to 6.1% in first half of 2008 compared to 7.0% in first half of 2007.

Research and Development Expense

	26-weeks ended June 28, 2008					26-weeks ended June 30, 2007					Quarter over Quarter
	Research &					Research &
	Development		% of Revenues			Development		% of Revenues			$ Change		% Change
Outdoor/Fitness	$	12,829		6.8	%	$	10,655		7.7	%	$	2,174		20.4	%
Marine		10,192		8.0	%		8,339		6.8	%		1,853		22.2	%
Automotive/Mobile		42,604		3.9	%		24,401		3.0	%		18,203		74.6	%
Aviation		37,529		21.5	%		27,835		18.6	%		9,694		34.8	%
Total	$	103,154		6.5	%	$	71,230		5.8	%	$	31,924		44.8	%

The increase in research and development expense dollars was due to ongoing development activities for new products, the addition of 350 new engineering personnel to our staff during the period, and an increase in engineering program costs during the first half of 2008 as a result of our continued emphasis on product innovation. Research and development costs increased $31.9 million when compared with the year-ago period and increased 70 basis points as a percent of revenue as research and development growth outpaced revenue growth.

Operating Income

	26-weeks ended June 28, 2008					26-weeks ended June 30, 2007					Quarter over Quarter
	Operating Income		% of Revenues			Operating Income		% of Revenues			$ Change			% Change
Outdoor/Fitness	$	64,756		34.1	%	$	49,809		36.2	%	$	14,947			30.0	%
Marine		41,904		32.9	%		44,410		36.2	%		(2,506	)		-5.6	%
Automotive/Mobile		236,831		21.9	%		228,591		27.7	%		8,240			3.6	%
Aviation		67,745		38.7	%		57,082		38.1	%		10,663			18.7	%
Total	$	411,236		26.1	%	$	379,892		30.8	%	$	31,344			8.3	%

Operating income was down 470 basis points as a percent of revenue when compared to the year-ago period due to the decrease in gross margins, along with the costs associated with the European distributors, increases in staffing to support the growth of our businesses, and research and development expense associated with ongoing development activities. Operating margins decreased to 34.1%, 32.9%, and 21.9% in our outdoor/fitness, marine, and automotive/mobile segments, respectively, while operating margins increased to 38.7% within our aviation segment.

Other Income (Expense)

	26-weeks ended		26-weeks ended
	June 28, 2008		June 30, 2007
Interest Income	$	18,060	$	20,199
Foreign Currency Exchange	$	17,562	$	7,119
Gain on sale of equity securities	$	50,949		-
Other	$	799	$	334
Total	$	87,370	$	27,652

The average taxable equivalent interest rate return on invested cash during the first half of 2008 was 3.4% compared to 4.3% during the same period of 2007. The decrease in interest income is attributable to a decline in our cash balances and decreasing interest rates.

Foreign currency gains and losses for the Company are primarily tied to movements by the Taiwan Dollar, the Euro, and the British Pound Sterling. The U.S. Dollar remains the functional currency of Garmin (Europe) Ltd. The Euro is the functional currency of Garmin France, Garmin Deutschland, Garmin Iberia, Garmin Italia, and Garmin Belux. As these entities grow, Euro currency moves will generate material gains and losses. Additionally, Euro-based inter-company transactions in Garmin Ltd. can also generate currency gains and losses. The Canadian dollar and Danish Krone are the functional currency of Dynastream Innovations, Inc. and Garmin Danmark, respectively; due to these entities’ relative size, currency moves do not have a material impact on the Company’s financial statements.

The majority of the $17.6 million currency gain in the first half of 2008 was related to the tender of our Tele Atlas N.V. shares. This transaction generated a realized gain of $21.5 million due to the strengthening of the Euro between the date of purchase of the shares in October 2007 to the dates of tender in February, March, and June 2008. The remainder of the $3.9 million currency loss in the first half of 2008 was primarily due to the weakening of the U.S. Dollar compared to the Taiwan Dollar. During the first half of fiscal 2008 the Taiwan Dollar exchange rate increased 6.8% in comparison to the USD, resulting in a $38.2 million loss. Offsetting this impact, the Euro has strengthened 7.1% relative to the U.S. Dollar during the first half which resulted in a $34.0 million gain. The relative strength of the Taiwan Dollar and Euro have offsetting impacts due to the use of the Taiwan Dollar for manufacturing costs while the Euro transactions relate to revenue. Other net currency gains and the timing of transactions created the remaining gain of $0.3 million.

The majority of the $7.1 million currency gain in the first half of 2007 was due to the strengthening of the U.S. Dollar compared to the Taiwan Dollar. During the first half of fiscal 2007 the exchange rate increased 0.8% to $32.86 TD/USD at June 30, 2007 from $32.60 TD/USD at December 30, 2006, resulting in $4.9 million of the period’s gain. While the British Pound Sterling strengthened relative to the U.S. Dollar during the period, the timing of transactions during the period resulted in Garmin Europe recording a $1.6 million gain.

Other income of $51.7 million in the first half of 2008 was primarily generated from the sale of our equity interest in Tele Atlas N.V.

Income Tax Provision

Our earnings before taxes increased 22.3% when compared to the same period in 2007, and our income tax expense increased by $41.4 million, to $94.7 million, for the 26-week period ended June 28, 2008, from $53.3 million for the 26-week period ended June 30, 2007, due to earnings growth and our higher tax rate. The effective tax rate was 19.0% in the first half of 2008 and 13.1% in the first half of 2007. The higher tax rate in the first half of 2008 when compared to the same period in 2007 was driven by a change in tax law related to the repatriation of earnings from our Taiwan subsidiary and the unfavorable mix of taxable income among Company entities.

Net Income

As a result of the above, net income increased 14.0% for the 26-week period ended June 28, 2008 to $403.9 million compared to $354.2 million for the 26-week period ended June 30, 2007.

Liquidity and Capital Resources

Net cash generated by operating activities was $280.2 million for the 26-week period ended June 28, 2008 compared to $422.1 million for the 26-week period ended June 30, 2007. We experienced a $112.9 million year-to-date increase in net inventories in this 26-week period of 2008, an increase required to fill strong orders for our products and to address overall growing demand for our products. We attempt to carry sufficient inventory levels of finished goods and key components so that potential supplier shortages have as minimal an impact as possible on our ability to deliver our finished products. Accounts receivable decreased $311.6 million, net of bad debts, during the first half of 2008 due to lower shipments compared to the seasonally strong fourth quarter.

Cash flow used in investing activities during the 26-week period ending June 28, 2008 was $69.6 million. Cash flow used in investing activities included $79.9 million in capital expenditures related to the build-out of our Linkou manufacturing facility, completion of our expanded North American distribution facility and maintenance activities, and the acquisition of European distributors for $34.8 million. In addition, the net sale of securities provided $46.1 million of cash flow. The net sale was primarily related to $72.4 million of cash generated from the tender of our shares of Tele Atlas N.V. offset by the purchase of fixed income securities associated with the management of our on-hand cash balances. It is management’s goal to invest the on-hand cash consistent with the Company’s investment policy, which has been approved by the Board of Directors. The investment policy’s primary purpose is to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of maximum safety. The Company’s average taxable equivalent return on its investments during the period was approximately 3.4%.

Net cash used by financing activities during the period was $309.3 million resulting from the use of $318.5 million for stock repurchased under our stock repurchase plans, offset by $9.2 million from the issuance of common stock related to our Company stock option plan and stock based compensation tax benefits.

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

We believe that our existing cash balances and cash flow from operations will be sufficient to meet our projected capital expenditures, working capital, repurchase of shares, and other cash requirements at least through the end of fiscal 2008.

Contractual Obligations and Commercial Commitments

Pursuant to certain agreements, the Company has contractual commitments of approximately $28.2 million over the next 3 years.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Sensitivity

We have market risk primarily in connection with the pricing of our products and services and the purchase of raw materials. Product pricing and raw material costs are both significantly influenced by semiconductor market conditions. Historically, during cyclical economic downturns, we have been able to offset pricing declines for our products through a combination of introducing new products with higher margins and success in obtaining price reductions in raw material costs. In recent quarters we have experienced an increase in raw materials costs and an increase in the sale of lower-margin products as a part of the product mix, resulting in reduced gross margins.

Inflation

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

Foreign Currency Exchange Rate Risk

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

Foreign currency gains and losses for the Company are primarily tied to movements by the Taiwan Dollar, the Euro, and the British Pound Sterling. The U.S. Dollar remains the functional currency of Garmin (Europe) Ltd. The Euro is the functional currency of Garmin France, Garmin Deutschland, Garmin Iberia, Garmin Italia, and Garmin Belux. As these entities grow, Euro currency moves will generate material gains and losses. Additionally, Euro-based inter-company transactions in Garmin Ltd. can also generate currency gains and losses. The Canadian dollar and Danish Krone are the functional currency of Dynastream Innovations, Inc. and Garmin Danmark, respectively; due to these entities’ relative size, currency moves do not have a material impact on the Company’s financial statements.

Interest Rate Risk

As of June 28, 2008, we have minimal interest rate risk as we have no material outstanding long term debt and we intend to hold marketable securities until they mature.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. As of June 28, 2008, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of June 28, 2008 that our disclosure controls and procedures were effective such that the information relating to the Company, required to be disclosed in our Securities and Exchange Commission ("SEC") reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company's management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There has been no change in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended June 28, 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

Encyclopaedia Britannica, Inc. v. Alpine Electronics of America, Inc., Alpine Electronics, Inc., Denso Corporation, Toyota Motor Sales, U.S.A., Inc., American Honda Motor Co., Inc., and Garmin International, Inc. On May 16, 2005, Encyclopaedia Britannica, Inc. (“Encyclopaedia Britannica”) filed suit in the United States District Court for the Western District of Texas, Austin Division, against Garmin’s wholly owned subsidiary Garmin International, Inc. (“Garmin International”) and five other unrelated companies, alleging infringement of U.S. Patent No. 5,241,671 (“the ‘671 patent”). Garmin International believes that it should not be found liable for infringement of the ‘671 patent and additionally that the ‘671 patent is invalid. On December 30, 2005, Garmin International filed a Motion for Summary Judgment for Claim Invalidity Based on Indefiniteness. On March 1, 2006 the court held a hearing on construction of the claims of the ‘671 patent. The parties await the court’s ruling on Garmin’s summary judgment motion and the court’s claim construction order. On May 23, 2006, Encyclopaedia Britannica filed an amended complaint claiming that Garmin International and the other defendants also infringe U.S. Patent No. 7,051,018 (“the ‘018 patent”), a continuation patent of the ‘671 patent, which issued on May 23, 2006. Garmin International believes that it should not be found liable for infringement of the ‘018 patent and additionally that the ‘018 patent is invalid. On July 25, 2006, Encyclopaedia Britannica filed a new complaint claiming that Garmin International and the other defendants also infringe U.S. Patent No. 7,082,437 (“the ‘437 patent”), a continuation patent of the ‘671 patent, which issued on July 25, 2006. Garmin International believes that it should not be found liable for infringement of the ‘437 patent and additionally that the ‘437 patent is invalid. Encyclopaedia Britannica has asserted the ’018 and ’437 patents against other parties in Encyclopaedia Britannica v. Magellan Navigation, Inc., et al., Case No. 07-CA-787 (LY)(W.D. Tex). On October 5, 2007, the defendants in that case filed a Motion for Summary Judgment of Invalidity of the ’018 and ’437 patents and the parties await a hearing and/or the court’s ruling on that motion. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, we believe that the claims are without merit and intend to vigorously defend these actions.

Nuvio Corporation v. Garmin International, Inc. and Garmin Ltd. On February 26, 2008, Nuvio Corporation filed a lawsuit in the United States District Court for the District of Kansas claiming that Garmin’s use of its nüvi^® trademark in connection with the sale of personal navigation devices and Garmin’s use of its nüvifone^™ trademark in connection with the announcement of its new wireless handset infringe U.S. Service Mark Registration No. 3,074,020 for the service mark nuvio for use in connection with the provision of internet telephony services (“Asserted Mark”). Garmin believes that it should not be found liable for infringement of the Asserted Mark. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, we believe that the claims are without merit and we will vigorously defend this lawsuit.

SP Technologies, LLC v. Garmin Ltd., Garmin International, Inc., TomTom, Inc., and Magellan Navigation, Inc. On June 5, 2008, SP Technologies, LLC filed a lawsuit in the United States District Court for the Northern District of Illinois against Garmin Ltd. and Garmin International, Inc. alleging infringement of U.S. Patent No. 6,784,873 (“the ’873 patent”). On July 7, 2008, SP Technologies, LLC filed an amended complaint alleging infringement of the ’873 patent against additional defendants TomTom, Inc. and Magellan Navigation, Inc. Although there can be no assurance that an unfavorable outcome of this litigation would not have a material adverse effect on our operating results, liquidity or financial position, Garmin believes that it should not be found liable for infringement of the ’873 patent and additionally that the ’873 patent is invalid.

From time to time the Company and its subsidiaries are involved in other legal actions arising in the ordinary course of our business. We believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.

Item 1A. Risk Factors

There are many risks and uncertainties that can affect our future business, financial performance or share price. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2007. There have been no material changes during the 13-week and 26-week periods ended June 28, 2008 in the risks described in our Annual Report on Form 10-K. These risks, however, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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

The Board of Directors approved a share repurchase program on February 4, 2008, authorizing the Company to repurchase up to 5,000,000 shares of the Company as market and business conditions warrant. This share repurchase program was completed in second quarter 2008.

The Board of Directors approved a share repurchase program on June 6, 2008, authorizing the company to repurchase up to 10,000,000 shares of the Company as market and business conditions warrant. The share repurchase authorization expires on December 31, 2009.

The following table lists the Company’s share purchases during the second quarter of fiscal 2008:

Total Number of Shares

Maximum Number of

Purchased as Part of

Shares That May Yet

Total # of

Average Price

Publicly Announced

Be Purchased Under

Period

Shares Purchased

Paid Per Share

Plans or Programs

the Plans or Programs

13-weeks ended

June 30, 2007

5,175,000

44.14

5,175,000

8,400,000

Total

5,175,000

44.14

5,175,000

8,400,000

Item 3. Defaults Upon Senior Securities

None

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

The Company held its Annual General Meeting of Shareholders on June 6, 2008. Proxies for the meeting were solicited pursuant to Regulation 14A. There was no solicitation in opposition to the Board of Directors’ nominees for election as directors as listed in the Proxy Statement and all such nominees were elected. Listed below is each matter voted on at the Company’s Annual General Meeting. All such matters were approved. A total of 203,491,406 common shares or approximately 94% of the common shares outstanding on the record date, were present in person or by proxy at the Annual General Meeting. These shares were voted as follows:

Election of Two Directors of the Company:

Nominee	For		Withheld

Donald H. Eller		202,569,883		921.523
Clifton A. Pemble		202,547,667		943,739

The terms of office of Directors Donald H. Eller and Clifton A. Pemble will continue until the Annual General Meeting in 2011. The terms of office of Directors Gene M. Betts and Thomas A. McDonnell will continue until the Annual General Meeting of Shareholders in 2010. The terms of office of Directors Min H. Kao and Charles W. Peffer will continue until the Annual General Meeting of Shareholders in 2009.

Ratification of the Appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2008 Fiscal Year:

For		Against			Abstain
203,004,117			272,075			215,214

Item 5. Other Information

Not applicable

Item 6. Exhibits

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

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

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

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

SIGNATURES

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

GARMIN LTD.

By	/s/ Kevin Rauckman
	Kevin Rauckman
	Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)

Dated: August 6, 2008

INDEX TO EXHIBITS

Exhibit No.	Description

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

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

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

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