GRMN
Garmin LTD
NYSE
10-K/A: Garmin Files Amended 10-K to Correct Related Party Transaction Disclosures
Sentiment:
Annual Report Amendment
29 November 2024 5:00 PM
Garmin Ltd. has filed an amendment to its annual report to include previously omitted disclosures regarding related party transactions and director independence.
Worse than expected
The document indicates worse than expected results because the company had to amend its annual report due to omissions of material information regarding related party transactions.
Summary
- Garmin Ltd. filed an amendment to its annual report on Form 10-K to correct omissions related to certain related party transactions and director independence.
- The amendment addresses the omission of related party transactions involving family members of two executive officers, Philip I. Straub and Susan Lyman, who received compensation exceeding $120,000 annually.
- The Audit Committee has reviewed and ratified these transactions, as well as three other similar transactions where compensation exceeded $60,000 but was less than $120,000.
- The original report was filed on February 21, 2024, and the proxy statement was filed on April 24, 2024.
- This amendment does not change any previously reported financial results or reflect events after the original report date.
Sentiment
Score: 4
Explanation: The sentiment is negative due to the need for an amendment to correct errors in the original report, indicating potential weaknesses in internal controls and corporate governance. However, the company has taken steps to rectify the situation.
Positives
- Garmin has taken steps to rectify omissions in its original annual report.
- The Audit Committee has reviewed and ratified the related party transactions, ensuring compliance with company policy.
- The company has disclosed the related party transactions and provided additional information.
Negatives
- The original annual report omitted material information regarding related party transactions.
- The need for an amendment indicates a lapse in internal controls or oversight.
- The company had to restate Item 15 to include the required certifications by the company's principal executive officer and principal financial officer.
Risks
- The omission of related party transactions could raise concerns about corporate governance and transparency.
- Failure to properly disclose related party transactions could lead to regulatory scrutiny or penalties.
- The need for an amendment may erode investor confidence.
Future Outlook
This amendment does not change any previously reported financial results, nor does it reflect events occurring after the date of the Original Report.
Management Comments
- Douglas G. Boessen, Chief Financial Officer, certified that the report does not contain any untrue statement of a material fact or omit to state a material fact.
- Clifton A. Pemble, President and Chief Executive Officer, certified that the report does not contain any untrue statement of a material fact or omit to state a material fact.
Industry Context
The amendment highlights the importance of robust internal controls and compliance with SEC regulations regarding related party transactions, which is a common area of scrutiny for public companies.
Comparison to Industry Standards
- Many public companies have faced similar issues with related party transaction disclosures, highlighting the need for strong internal controls and audit oversight.
- Companies like Apple and Google have faced scrutiny over related party transactions, demonstrating that even large, well-established companies are not immune to these issues.
- The level of detail provided in the amendment is consistent with industry best practices for correcting errors in financial reporting.
Stakeholder Impact
- Shareholders may be concerned about the company's internal controls and transparency.
- Employees may be affected by any changes in policies or procedures related to related party transactions.
- The company's reputation may be impacted by the need for an amendment.
Next Steps
- Garmin will likely need to review and strengthen its internal controls and procedures related to related party transactions.
- The company may face further scrutiny from regulators or investors regarding the omissions.
Related Party Transactions
- The amendment discloses related party transactions involving family members of executive officers Philip I. Straub and Susan Lyman.
- These family members received annual compensation ranging from over $120,000 to less than $300,000.
- Three additional related party transactions with compensation exceeding $60,000 but less than $120,000 were also ratified.
Key Dates
- October 25, 2019: Organizational Regulations of Garmin Ltd. amended.
- February 15, 2019: Garmin Ltd. 2011 Non-Employee Directors Equity Incentive Plan amended and restated.
- June 7, 2019: Garmin Ltd. 2005 Equity Incentive Plan amended and restated.
- June 9, 2023: Articles of Association of Garmin Ltd. amended and restated.
- June 9, 2023: Garmin Ltd. Employee Stock Purchase Plan amended and restated.
- December 30, 2023: Fiscal year ended for the original report.
- February 16, 2024: Number of shares outstanding of the registrants common shares.
- February 21, 2024: Original Annual Report on Form 10-K filed with the SEC.
- April 24, 2024: Company's proxy statement filed with the SEC.
- October 2024: Company determined that related party transactions had not been approved or ratified by the Audit Committee.
- November 29, 2024: Date of the Amendment No. 1 to the Annual Report on Form 10-K/A.
Keywords
related party transactions, amendment, Form 10-K, corporate governance, audit committee, director independence, financial reporting, executive compensation
GRMN
Garmin LTD
NYSE
Sector: TBD
Filings with Classifications
Better than expected
30 April 2025 7:00 AM
Earnings Release
- Garmin's Q1 2025 revenue and operating income reached record levels, exceeding expectations.
- Pro forma EPS grew by 13%, indicating strong profitability.
- The company is maintaining its full-year pro forma EPS guidance, suggesting confidence in future performance.
Better than expected
19 February 2025 7:00 AM
Annual Results
- Net sales increased 20% in fiscal year 2024 when compared to the year-ago period.
- Gross profit dollars in fiscal year 2024 increased 23%, primarily due to the increase in net sales compared to the year-ago period.
- Total operating income increased 46% in absolute dollars and increased 440 basis points as a percent of revenue in fiscal year 2024 compared to fiscal year 2023.
Better than expected
19 February 2025 7:00 AM
Earnings Release
- Garmin reported record full-year revenue and profit, exceeding previous performance.
- The company's pro forma EPS grew by 32%, indicating strong earnings growth.
- Garmin's guidance for 2025 suggests continued growth and profitability.
Worse than expected
29 November 2024 5:00 PM
Annual Report Amendment
- The document indicates worse than expected results because the company had to amend its annual report due to omissions of material information regarding related party transactions.
Better than expected
30 October 2024 7:00 AM
Quarterly Report
- The company's net sales, gross profit, operating income, and net income all significantly exceeded the prior year's results, indicating better than expected performance.
Better than expected
30 October 2024 7:00 AM
Quarterly Report
- Garmin's Q3 results exceeded expectations with record revenue and operating income, leading to an increase in full-year guidance.
Better than expected
31 July 2024 7:00 AM
Quarterly Report
- The company's net sales, operating income, and net income all increased significantly compared to the same periods in the previous year, indicating better than expected results.
Better than expected
31 July 2024 7:00 AM
Quarterly Report
- Garmin's revenue and EPS exceeded expectations, leading to an increase in full-year guidance.
- The company's operating income grew by 20%, surpassing previous projections.
- The fitness and auto OEM segments showed particularly strong growth, exceeding anticipated performance.
Capital raise
11 June 2024 11:57 AM
Annual General Meeting Results
- The shareholders approved the renewal of Garmin's existing capital band, giving the Board of Directors authority to issue new shares or cancel shares for a one-year period ending on June 7, 2025.
- This provides the company with the flexibility to raise capital if needed.
Better than expected
1 May 2024 7:00 AM
Quarterly Report
- The company's net sales, gross profit, and operating income all significantly exceeded the prior year's results.
- The fitness segment showed a substantial increase in operating income, demonstrating strong performance.
- Cash flow from operations increased substantially, providing financial flexibility.
Better than expected
1 May 2024 7:00 AM
Quarterly Report
- Garmin's revenue, operating income, and EPS all exceeded expectations, showing significant year-over-year growth.
- The company achieved record first quarter revenue in multiple segments, indicating strong market performance.
- The expansion of gross and operating margins demonstrates improved profitability.
Better than expected
21 February 2024 7:02 AM
Quarterly Report
- The company reported record full-year revenue and strong growth in several segments, exceeding expectations.
- The fourth-quarter results showed significant increases in revenue, gross margin, and operating income, indicating better-than-expected performance.
- The pro forma EPS growth of 27% in the fourth quarter and 9% for the full year exceeded expectations.
Better than expected
21 February 2024 7:00 AM
Annual Report
- Net income increased 32% to $1,289.6 million from $973.6 million in the prior year.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.