台灣國際航電 (GRMN) 2022 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to Garmin Limited First Quarter 2022 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

大家好，感謝您的關注。歡迎參加 Garmin 有限公司 2022 年第一季業績電話會議。 （操作員指示）請注意，今天的會議正在錄製中。 （操作員指示）

I would now like to hand the conference over to your first speaker today to Teri Seck, Director of Investor Relations. Please go ahead.

現在，我想將今天的第一位演講嘉賓交給投資者關係總監Teri Seck。請您發言。

Good morning. We would like to welcome you to Garmin Ltd.'s First Quarter 2022 Earnings Call. Please note that the earnings press release and related slides are available at Garmin's Investor Relations site on the Internet at www.garmin.com/stock. An archive of the webcast and related transcript will also be available on our website.

早安!歡迎您參加 Garmin Ltd. 2022 年第一季財報電話會議。請注意，財報新聞稿及相關投影片可在 Garmin 投資者關係網站 www.garmin.com/stock 取得。會議錄音及相關文字記錄也將在我們的網站上發布。

This earnings call includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding our future financial position, revenues, earnings, gross margins, operating margins, future dividends or share repurchases, market shares, product introductions, future demand for our products and plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this earnings call may not occur, and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K filed with the Securities and Exchange Commission. In particular, there is significant uncertainty about the duration and impact of the COVID-19 pandemic. This means that results could change at any time, and any statement about the impact of COVID-19 on the company's business results and outlook is the best estimate based on the information available as of today's date.

本次財報電話會議包含有關 Garmin Ltd. 及其業務的預測和其他前瞻性聲明。任何有關我們未來財務狀況、收入、收益、毛利率、營業利潤率、未來股息或股票回購、市場份額、產品推出、未來產品需求以及計劃和目標的陳述均為前瞻性陳述。本次財報電話會議中討論的前瞻性事件和情況可能不會發生，實際結果可能會因影響 Garmin 的風險因素而產生重大差異。有關這些風險因素的資訊包含在我們向美國證券交易委員會提交的 10-K 表中。特別是，COVID-19 疫情的持續時間和影響存在很大的不確定性。這意味著結果可能隨時發生變化，任何關於 COVID-19 對公司業務結果和前景影響的陳述都是基於截至今天可用資訊的最佳估計值。

Presenting on behalf of Garmin Ltd. this morning are Cliff Pemble, President and Chief Executive Officer; and Doug Boessen, Chief Financial Officer and Treasurer.

今天早上代表 Garmin Ltd. 發言的是總裁兼執行長 Cliff Pemble 和財務長兼財務主管 Doug Boessen。

At this time, I would like to turn the call over to Cliff Pemble.

現在，我想將電話轉給 Cliff Pemble。

Thank you, Teri, and good morning, everyone. As reported earlier today, consolidated revenue increased 9% to $1.17 billion, representing a new first quarter record. Four business segments reported revenue growth in the quarter, 3 of which delivered double-digit growth.

謝謝Teri，大家早安。正如今天稍早報導的那樣，合併營收成長9%，達到11.7億美元，創下第一季新高。四個業務部門在本季度實現了營收成長，其中三個部門實現了兩位數成長。

We generated $229 million of operating income, down 8% from the prior year. Operating margin was 19.5% and was negatively impacted by gross margin performance, which declined due to historically high freight costs, combined with the strengthening of the U.S. dollar. In addition, operating expenses increased for a variety of reasons, including higher associate head count, increased compensation costs and the increase of certain operational expenses as business activities continue to normalize.

我們實現了2.29億美元的營業收入，較前一年下降8%。營業利益率為19.5%，受到毛利率表現的負面影響。毛利率因運費成本歷史性高企以及美元走強而下降。此外，營業費用也因多種原因而增加，包括員工人數增加、薪資成本增加以及隨著業務活動持續正常化，某些營運費用增加。

We performed very well during the quarter despite a combination of old and new headwinds. Supply chain constraints persist, which limited the orders we could fill. Russia's invasion of Ukraine created an unthinkable humanitarian crisis and further complicated the global economic outlook. Despite these challenges, demand for our products remains strong and we are optimistic about the future.

儘管面臨新舊不利因素的雙重衝擊，本季我們依然表現優異。供應鏈約束持續存在，限制了我們能夠完成的訂單。俄羅斯入侵烏克蘭造成了難以想像的人道危機，並使全球經濟前景更加複雜。儘管面臨這些挑戰，我們產品的需求依然強勁，我們對未來充滿樂觀。

Our Board of Directors recently approved a $300 million share repurchase plan, which is in addition to the proposed $2.92 per share dividend that will be considered by shareholders at the upcoming annual meeting.

我們的董事會最近批准了一項 3 億美元的股票回購計劃，這是對擬議的每股 2.92 美元股息的補充，股東將在即將召開的年度會議上考慮該計劃。

Before turning the call over to Doug, I'll provide highlights by segment and a summary of what we see ahead.

在將電話轉給 Doug 之前，我將按部分提供重點內容並總結我們的未來展望。

Starting with business, revenue decreased 28% to $221 million. Gross and operating margins were 48% and 0%, respectively. All product categories declined, but the normalization of demand for cycling products was the main contributor. While revenue from fitness wearables declined, on a combined basis, wearable device revenue across all segments at Garmin experienced robust growth.

首先從業務來看，營收下降28%，至2.21億美元。毛利率和營業利益率分別為48%和0%。所有產品類別均出現下滑，但騎乘產品需求的正常化是主要原因。雖然健身穿戴裝置的收入有所下降，但總體而言，Garmin所有部門的穿戴式裝置收入均實現了強勁成長。

We expected the first half of the year to be challenging for the fitness segment as we compare against the outstanding performance of the prior year. While the decline was greater than expected, we believe these trends will moderate in the back half of the year as we move past the pandemic swings of 2021 and benefit from new product introductions.

與去年同期的出色表現相比，我們預計健身板塊上半年將充滿挑戰。雖然下滑幅度大於預期，但我們相信，隨著我們逐漸擺脫2021年的疫情波動，並受益於新產品的推出，這些趨勢將在下半年有所緩和。

Moving to the outdoor segment. Revenue increased 50% to $385 million with growth in multiple categories led by strong demand for adventure watches. Gross and operating margins were 64% and 39%, respectively, resulting in operating income of $149 million.

戶外產品業務方面，營收成長50%，達到3.85億美元，其中多個類別均實現成長，其中探險手錶需求強勁。毛利率和營業利益率分別為64%和39%，營業利益達1.49億美元。

During the quarter, we announced sweeping updates to our adventure watch lineup, including our flagship fenix 7 series featuring a distinctive new design with a touchscreen display, and the Instinct 2 series available in 2 sizes, including versions that can operate indefinitely using our exclusive solar power technology. We also announced the all-new epix with a bright AMOLED touchscreen display and class-leading battery life up to 16 days. We believe that strong demand for these new products as well as other categories in the segment will be a growth driver for the remainder of the year.

本季度，我們宣布了探險手錶系列的全面更新，包括採用獨特全新設計並配備觸控螢幕的旗艦產品Fenix 7系列，以及提供兩種尺寸的Instinct 2系列，其中部分版本可使用我們獨有的太陽能技術無限期運行。我們還發布了全新Epix，它配備明亮的AMOLED觸摸屏，並擁有長達16天的領先電池續航時間。我們相信，這些新產品以及該領域其他類別產品的強勁需求將成為今年剩餘時間的成長動力。

Looking next at the aviation segment. Revenue increased 1% to $175 million with growth driven by OEM product categories. Supply constraints impacted sales of aftermarket products but the situation improved throughout the quarter. Gross and operating margins were 73% and 23%, respectively, resulting in operating income of $40 million.

接下來看看航空業務。營收成長1%，達到1.75億美元，成長主要得益於OEM產品類別。供應緊張影響了售後產品的銷售，但整個季度情況有所改善。毛利率和營業利益率分別為73%和23%，營業收入達4,000萬美元。

Aircraft OEMs are reporting robust orders from both new and existing customers. Aftermarket demand is also strong as customers invest in new cockpit systems. We believe these are positive indicators of growth for the remainder of the year.

飛機原始設備製造商報告稱，新舊客戶訂單強勁。隨著客戶投資新的駕駛艙系統，售後市場需求也強勁。我們相信，這些都是今年剩餘時間成長的正面指標。

The marine segment delivered another quarter of impressive results with revenue increasing 21% to $254 million. We experienced broad-based growth across multiple product categories led by chartplotters. Gross and operating margins were 51% and 23%, respectively, resulting in operating income of $59 million.

船舶業務本季再創佳績，營收成長21%，達2.54億美元。以海圖儀為首的多個產品類別均實現了廣泛成長。毛利率和營業利益率分別為51%和23%，營業利益達5,900萬美元。

LiveScope has proven to be a halo technology for Garmin, and the new LiveScope Plus sonar system raises the bar with higher resolution images and improved target separation. We continue to see strong demand for our marine products and LiveScope Plus builds on this momentum. We believe this is a positive indicator of growth for the remainder of the year.

LiveScope 已被證明是 Garmin 的一大亮點，而全新的 LiveScope Plus 聲納系統則憑藉更高分辨率的圖像和更出色的目標分離能力，進一步提升了聲納技術的標準。我們持續看到市場對海洋產品的強勁需求，LiveScope Plus 正是在這股勢頭的推動下不斷發展的。我們相信，這預示著今年剩餘時間的成長前景一片光明。

Moving finally to the auto segment. Revenue increased 11% to $138 million, with growth from both OEM and consumer categories. Gross margin was 38%, and we recorded an operating loss of $20 million driven by investments in auto OEM programs.

最後談談汽車業務。營收成長11%，達到1.38億美元，OEM和消費品類別均成長。毛利率為38%，由於汽車OEM項目的投資，我們錄得2000萬美元的營運虧損。

In consumer auto, we continue to diversify our product offerings with the launch of the Instinct 2 dezl edition smartwatch for truck drivers. In the OEM category, we made significant progress preparing for the launch of the next-generation BMW computing module platform. BMW approved our new Poland factory, giving it a rare green rating for mass production readiness. We anticipate delivering production parts to BMW starting in the second quarter.

在消費汽車領域，我們持續豐富產品線，推出了卡車司機的 Instinct 2 dezl 版智慧手錶。在 OEM 領域，我們在下一代BMW運算模組平台的發布準備工作上取得了重大進展。 BMW批准了我們在波蘭的新工廠，並授予其罕見的量產綠色評級。我們預計第二季開始向寶馬交付生產零件。

Before I turn the call over to Doug, it's important to remember that our diversified business model offers many different paths to achieve our consolidated growth goals. We remain focused on creating highly differentiated products in all segments that excite our customers and lead to success.

在我將電話轉給Doug之前，需要強調的是，我們多元化的商業模式提供了多種途徑來實現我們整合的成長目標。我們將繼續專注於在各個細分市場中打造高度差異化的產品，以激發客戶興趣並最終取得成功。

Regarding our outlook for the rest of the year, I mentioned several new and existing headwinds we face, and we cannot predict the impact that these might have on the business. Also, the first quarter represents the lowest seasonal quarter of our financial year and much of the year remains ahead of us. With these things in mind, we are maintaining our 2022 guidance issued in February, which called for consolidated revenue of $5.5 billion and EPS of $5.90 a share.

關於今年剩餘時間的展望，我提到了我們面臨的一些新的和現有的不利因素，我們無法預測這些因素可能對業務造成的影響。此外，第一季是我們財年中業績最差的季度，而今年的大部分時間我們仍將面臨挑戰。考慮到這些因素，我們維持2月發布的2022年業績指引，即合併營收55億美元，每股收益5.90美元。

So that concludes my remarks. Next, Doug will walk you through additional details on our financial results. Doug?

我的發言到此結束。接下來，Doug 將向大家詳細介紹我們的財務表現。 Doug？

Thanks, Cliff. Good morning, everyone. I begin by reviewing our first quarter financial results and provide comments on the balance sheet, cash flow statement and taxes.

謝謝，克里夫。大家早安。首先，我回顧我們第一季的財務業績，並對資產負債表、現金流量表和稅費發表意見。

We posted revenue of $1.173 billion in the first quarter, representing 9% increase year-over-year. Gross margin was 56.5%, 330 basis point decrease from the prior quarter. The decrease was primarily due to higher freight costs and favorable impact of foreign exchange rates.

我們第一季營收為11.73億美元，年增9%。毛利率為56.5%，較上一季下降330個基點。毛利率下降主要由於運費上漲以及匯率的利多影響。

Operating expense as a percentage of sales was 37%, a 50 basis point increase. Operating income was $229 million, 8% decrease. Operating margin was 19.5%, 300 basis point decrease. Our GAAP EPS was $1.09. The former EPS was $1.11.

營業費用佔銷售額的37%，上升了50個基點。營業收入為2.29億美元，下降了8%。營業利益率為19.5%，下降了300個基點。我們的GAAP每股收益為1.09美元。之前的每股收益為1.11美元。

Next, we look at our first quarter revenue by segment and geography. In the first quarter, we achieved double-digit growth in 3 of our 5 segments, led by the outdoor segment, robust growth of 50%; followed by the marine segment, 21% growth; and the auto segment, 11% growth. By geography, 21% growth in APAC, 13% growth in Americas was partially offset by 1% decline in EMEA, which was negatively impacted by foreign exchange rates during the quarter.

接下來，我們按業務部門和地區劃分，分析第一季的收入。第一季度，我們五個業務部門中的三個實現了兩位數成長，其中戶外用品部門成長強勁，達50%；其次是船舶用品部門，成長21%；汽車用品部門成長11%。按地區劃分，亞太地區成長21%，美洲地區成長13%，但受本季外匯匯率波動影響，歐洲、中東和非洲地區（EMEA）下降1%，部分抵銷了這一成長。

Looking next at operating expenses. First quarter operating expense increased by $42 million or 11%. Research and development increased $20 million year-over-year, primarily due to engineering personnel costs. Advertising expense increased approximately $3 million due to higher spend in the outdoor and marine segments. SG&A increased $19 million compared to the prior year quarter, primarily due to increases in personnel-related expenses, information technology costs.

接下來看看營運費用。第一季營運費用增加了4,200萬美元，增幅11%。研發費用年增2000萬美元，主要原因是工程人員成本增加。廣告費用增加約300萬美元，原因是戶外和海洋業務部門的支出增加。銷售、一般及行政費用（SG&A）較去年同期增加1,900萬美元，主因是人員相關費用及資訊科技成本增加。

A few highlights on the balance sheet, cash flow statement and taxes. We ended the quarter with cash, marketable securities approximately $3 billion. Accounts receivable decreased sequentially to $600 million following a seasonally strong fourth quarter and grew year-over-year, relatively in line with our sales growth.

以下是資產負債表、現金流量表和稅項的一些亮點。本季末，我們持有現金和有價證券約30億美元。應收帳款環比下降至6億美元，這得益於第四季度的季節性強勁表現，並且同比增長，與我們的銷售額增長基本一致。

Inventory balance increased year-over-year to $1.3 billion. We're executing our strategy, increase days supply to support our increasingly diversified product lines to optimize the mix of ocean versus air freight shipments to carry sufficient levels of raw material safety stock to mitigate increased lead times.

庫存餘額較去年同期成長至13億美元。我們正在執行策略，增加供應天數以支持我們日益多樣化的產品線，優化海運和空運運輸組合，以保持充足的原材料安全庫存，從而緩解交貨週期的延長。

In the first quarter of 2022, we generated free cash flow of $126 million, a $206 million decrease in the prior quarter, primarily due to increased working capital needs and higher capital expenditures, also reported effective tax rate of 10.3% compared to 12.2% in the prior quarter. The decrease in effective tax rate is primarily due to an increase in U.S. tax deductions and credits.

2022年第一季，我們產生的自由現金流為1.26億美元，較上一季減少2.06億美元，主要原因是營運資本需求增加及資本支出增加。同時，本季有效稅率為10.3%，而上一季為12.2%。有效稅率的下降主要由於美國稅收抵免額度增加。

This concludes our formal remarks. Talon, could you please open the line for Q&A?

我們的正式發言到此結束。塔隆，您能打開問答環節嗎？

(Operator Instructions) I show our first question comes from the line of Paul Chung from JPMorgan.

（操作員指示）我表明我們的第一個問題來自摩根大通的 Paul Chung。

First up, you had a very nice head start in outdoor off the strength of fenix and other product releases. Any update to kind of the year and how we think about that? Should we expect kind of more product releases throughout the year? And then can you help us on the kind of seasonal outlook for outdoor? That would also be helpful.

首先，由於Fenix和其他產品的強勁發布，你們在戶外領域取得了非常好的開局。今年有什麼新消息嗎？我們對此有何看法？我們預計全年會有更多的產品發布嗎？然後，您能否為我們介紹戶外產品的季度展望？這也很有幫助。

Yes. I think in terms of the update to the year, we basically are still seeing things the way that we've laid them out, and it's very early in the year to really make any conclusions based on the start that we've had. But we do have a strong product lineup right now, and we have more new products coming throughout the year in all of our segments. And so a lot of our momentum and growth is driven around new innovation and new products.

是的。我認為，就今年的業績更新而言，我們基本上仍在按照既定的計劃進行，現在就根據年初的業績下結論還為時過早。但我們目前擁有強大的產品陣容，而且我們所有細分市場全年都會推出更多新產品。因此，我們的成長動力很大程度上來自於創新和新產品。

Got you. And then a similar question on fitness. The pace of decline was a bit more kind of than expected. How do we think about the balance of the year as well? And what drove the minimal operating profit in the quarter? Is that mostly component and cost related? And how does that rebound throughout the year?

明白了。然後關於健身業務也有一個類似的問題。下滑的速度比預期的快一些。我們怎麼看待今年的平衡？是什麼導致了本季的營運利潤微薄？這主要是因為零件和成本嗎？全年的反彈狀況如何？

Yes. So fitness was weaker than we expected for sure. And the cycling category is the biggest contributor to that. We are comping against really strong results from last year. So there's lots of moving pieces, lots of dimensions to this. But the cycling side of things is really the one that's the biggest impact.

是的。所以健身業務肯定比我們預期的弱。自行車類別是其中最大的貢獻者。我們與去年的強勁業績進行了比較。所以這其中有很多變數，很多方面。但自行車方面的影響確實最大。

But if you look at it from a different angle, the operating profit was mostly affected by FX and freight costs. If those things would have been under normal circumstances, we would have been pretty much in the range of where our gross margin and operating margin profiles are for the segment.

但如果換個角度來看，營業利潤主要受外匯和運費的影響。如果這些因素在正常情況下出現，我們的毛利率和營業利潤率應該與該部門的水平基本持平。

Got you. And then lastly, Doug, on free cash flow. Kind of any update on the annual guide? And the share buyback messaging, that's new. We haven't seen buybacks in 4 years -- last 4 years. How should we think about kind of the pace there and potential for more kind of material buybacks given kind of $3 billion net cash?

明白了。最後，Doug，關於自由現金流。年度指南有什麼更新嗎？還有股票回購訊息，這是新的。我們已經四年沒見過回購了——過去四年。考慮到30億美元的淨現金，我們應該如何看待回購的速度以及更多實質回購的可能性？

Yes. Yes. Regarding free cash flow, yes, still early in the year, but there's a couple of things you need to consider, one of which is our working capital needs. We did have some of those working capital needs here in Q1, where we saw inventory increased more than the previous year. You also need to factor in last year, we had a large amount of inventory increases in the back of the year. So hopefully, we won't have as much of an increase in the inventory, I'll say, year-over-year than we did last year in there. But the working free cash flow and other things, CapEx is pretty consistent year-over-year for the full year in there. It depends also on the operating side of things, but we'll give you more guidance on that in Q2.

是的，是的。關於自由現金流，是的，現在還處於年初階段，但有幾件事你需要考慮，其中之一就是我們的營運資本需求。我們在第一季確實有一些營運資本需求，因為我們的庫存比去年同期成長了更多。你還需要考慮到去年的情況，我們在年底庫存大幅增加。所以，我希望我們的庫存年增幅不會像去年同期那麼大。但營運自由現金流和其他資本支出，全年年比都相當穩定。這也取決於營運方面，但我們會在第二季提供更多指導。

As it relates to the share buyback, it's something that we evaluate with the Board, and we felt that was something that was appropriate at this point in time. Regarding the amount that we're going to be doing, it's really depending upon market conditions, business conditions at a point in time, the amount that we buy back during the period.

至於股票回購，我們會與董事會一起評估，我們認為目前是合適的。至於回購的金額，實際上取決於當時的市場狀況、業務狀況以及我們在此期間的回購金額。

I show our next question comes from the line of Will Power from Baird.

我認為我們的下一個問題來自貝爾德的威爾鮑爾。

Great. Maybe just a follow-up first on fitness. I think we, and you all noted, there were some particularly tough cycling comps year-over-year, but it sounds like there was some year-over-year weakness in the other fitness categories, too. I guess I'm wondering if there are any areas you'd call out there. Any key drivers of that? Maybe any comments on changes in the competitive climate? Just trying to understand the broader fitness picture.

太好了。或許可以先聊聊健身方面的問題。我想我們，以及各位，都注意到了，自行車比賽的競爭比前一年尤其激烈，但其他健身項目似乎也比前一年減弱。我想知道您能否指出一些方面。其中的關鍵驅動因素是什麼？或者您對競爭環境的變化有什麼看法？只是想了解更廣泛的健身情況。

Yes. I think that as we mentioned, all categories in this segment were weaker year-over-year. We're comparing against a really monster quarter from the last year. So that's one dimension. And then you can't discount the impact of our overall wearable product lineup across the company and particularly the release of the new adventure wearables on the outdoor side, which probably impacted things as well.

是的。正如我們所提到的，我認為這個細分市場的所有產品類別都比去年同期都表現疲軟。我們比較的是去年一個非常強勁的季度。所以這是一個方面。此外，我們也不能忽視我們整個公司穿戴式產品線的影響，尤其是戶外探險類穿戴裝置的發布，這可能也帶來了一些影響。

So as I mentioned, we experienced robust growth across all wearables at Garmin. So we feel like the market is robust and our position in the market is also very robust.

正如我之前提到的，Garmin 所有穿戴式裝置都實現了強勁成長。因此，我們感覺市場發展強勁，在市場上的地位也非常穩固。

Okay. That makes sense. Cliff, it'd be great to get a little more color as to what you're seeing kind of real-time across Europe. As you talk to your retail partners, have you seen any change in kind of purchasing trends, appetite from them just as you think about the impacts of the Russia-Ukraine conflict and inflationary pressures kind of across the continent, particularly in Eastern Europe? As you exit Q1 and obviously now into Q2, anything you'd call out there with respect to demand trends?

好的。這很有道理。克里夫，如果能更詳細地介紹一下您目前在歐洲的即時情況就更好了。在您與零售合作夥伴的溝通中，您是否注意到他們的購買趨勢和需求發生了變化？您是否考慮到了俄烏衝突以及整個歐洲大陸（尤其是東歐）通膨壓力的影響？隨著第一季的結束，顯然現在進入第二季度，您對需求趨勢有何看法？

Yes. I think Europe is more notably weak as you can see in our geographical results. I think really 2 aspects to that. One is the Ukraine situation. We definitely did see a noticeable impact in product registrations as that conflict broke out and was weaker for the initial period and has only recently started to show some signs of kind of popping back as people maybe normalize or get used to the risk environment that they're in there.

是的。我認為歐洲的疲軟更為明顯，正如您在我們地理區域結果中所看到的。我認為這主要有兩個方面。一是烏克蘭局勢。衝突爆發後，我們確實看到了產品註冊量受到的明顯影響，初期註冊量較低，直到最近才開始出現一些回升的跡象，因為人們可能已經逐漸適應了那裡的風險環境。

But the other factor for Europeans is the high inflation. It's really not just European, but it's global, but they particularly are impacted by much higher fuel prices and concern and worry over the economy. So I think those factors impacted us in Europe, but we saw a much stronger growth in Americas and APAC.

但對歐洲人來說，另一個因素是高通膨。這實際上不僅僅是歐洲的問題，而是全球的問題，他們特別受到高油價以及對經濟的擔憂和憂慮的影響。所以我認為這些因素影響了我們在歐洲的業務，但我們在美洲和亞太地區的成長卻更強勁。

Yes. Okay. I guess maybe just a last question. You maintained guidance for the year. Maybe just any other color as to your confidence there. I mean it sounds like it's really built just on the diversity of the business, and I recognize we're still early in the year. But as you think about the various uncertainties that are still out there, whether it's supply chain, inflation, et cetera, maybe just any other color as to what gives you confidence in maintaining that outlook at this point?

是的，好的。我想也許這只是最後一個問題。您維持了今年的業績指引。或許這只是您對此信心的另一種表述。我的意思是，這聽起來像是建立在業務多元化的基礎上的，我知道我們才剛開始。但考慮到仍然存在的各種不確定因素，無論是供應鏈、通貨膨脹等等，或許這只是您目前對維持這一前景的信心的一種表述？

Yes. As you said, we're maintaining what we said in February. It is early in the year, and this is our lowest seasonal quarter. So we like to see how the year is evolving before we make any material changes to our outlook.

是的。正如您所說，我們維持二月的預測不變。現在正值年初，而這是我們季度業績最低的一個季度。因此，我們希望先觀察今年的情況發展，然後再對預期做出任何重大調整。

I would say that in general, we see positive indicators, as I said in my remarks, across many of our segments. And at the same time, the uncertainties have increased and the complexities have increased, so we recognize that as well. But the diversity of our business is very high. The demand in several of our segments is strong. And so that's what we base our confidence on as we go forward.

我想說，總體而言，正如我在演講中所說，我們在許多領域都看到了積極的跡象。同時，不確定性和複雜性也在增加，我們也意識到了這一點。但我們的業務非常多元化，多個領域的需求強勁。這正是我們未來充滿信心的基礎。

Our next question comes from the line of Nik Todorov from Longbow.

我們的下一個問題來自 Longbow 的 Nik Todorov。

Doug and Cliff, first question on gross margin for fitness. How should we think about the trajectory throughout the year? Obviously, I think FX headwind, if anything, is probably going to increase in 2Q sequentially and the logistics piece is probably not changing much. So any kind of color on trajectory of fitness gross margin through the rest of the year?

道格和克里夫，第一個問題是關於健身業務的毛利率。我們該如何看待全年的走勢？顯然，我認為外匯逆風（如果有的話）可能會在第二季度環比加劇，而物流部分可能不會有太大變化。那麼，今年剩餘時間裡，健身業務的毛利率走勢如何呢？

Yes. As it relates to gross margin for fitness, yes, 2 of the big drivers there, obviously, are freight and FX. And actually, FX is a bigger impact on the fitness business just given our EMEA side of the business in there.

是的。至於健身業務的毛利率，顯然，其中兩個主要驅動因素是運費和外匯。實際上，考慮到我們在歐洲、中東和非洲地區的業務，外匯對健身業務的影響更大。

So as it relates to the year, it's still early in the year here, but we have to manage through those headwinds, and we'll have to see how those mitigate hopefully. We're doing things, hopefully, help mitigate some of the freight. I previously mentioned inventory. We're trying to optimize our ocean versus air to mitigate some of the increases there. But FX, that's something -- and we've seen more of the strengthening of dollar there and increases. So we have to see how that all plays out for the rest of the year.

就今年而言，現在還處於年初階段，但我們必須克服這些不利因素，並觀察這些因素如何緩解。我們正在採取措施，希望能減輕部分貨運壓力。我之前提到過庫存。我們正在努力優化海運與空運的運輸方式，以緩解部分貨運成本的上漲。但外匯方面，我們看到美元走強，匯率也跟著上漲。因此，我們必須觀察今年剩餘時間的走勢。

Okay. And then, Cliff, I think you mentioned in your remarks that you're starting to see some improvement in aviation in the aftermarket business as it relates to component supply. Do you have any visibility into further easing into the rest of the year? And do you expect maybe a return to some normal environment to the second half? Or that's too early to call?

好的。然後，克里夫，我記得您在發言中提到，您開始看到航空售後市場業務在零件供應方面有所改善。您認為今年剩餘時間航空業的政策會進一步放寬嗎？您是否預計下半年航空業會恢復正常？還是現在下結論還太早？

Yes. I think one of the things we mentioned actually last time is we expected the first half of the year to be more challenging for the aviation aftermarket because of the supply chain constraints we were experiencing. We've started to see that improve, especially as we rolled into the month of March and onward. But we do expect still to be able to see more improvement as we get into the back half because we're taking actions to dual source some parts as well as we're getting more supply from our existing suppliers.

是的。我想我們上次提到過，由於供應鏈受限，我們預計上半年航空售後市場將面臨更大挑戰。但我們已經看到情況有所改善，尤其是進入3月後。但我們預計下半年情況將有進一步改善，因為我們正在採取措施，從兩個供應商採購部分零件，同時從現有供應商那裡獲得更多供應。

Okay. And last question for me. There's been some signs of moderation of retail boating demand, and I know you're exposed more on the aftermarket side. But I'm just wondering, are you seeing any spillover effect, any signs of moderation on the aftermarket side of marine?

好的。最後一個問題。有一些跡象顯示零售船舶需求有所放緩，我知道你們在售後市場方面投入更多。但我只是想知道，你們是否看到了任何溢出效應，船舶售後市場方面有任何放緩的跡象嗎？

Yes. I think really nothing to speak of. We still see very strong demand for our most popular products and especially driven by the technology developments that we've made in the area of live sonar, and our display systems are all very good and sought after.

是的。我覺得沒什麼好說的。我們最受歡迎的產品仍然需求旺盛，尤其是在即時聲納領域的技術進步推動下，我們的顯示系統也非常出色，廣受歡迎。

I would say in terms of retail boating or I would say the OEM side is what we would call that, but in general, we still hear our OEM partners say that they're sitting on years of backlogs in their business and working very hard to deliver the boats that have been ordered. So we still see a strong demand cycle moving forward from the OEM side of the business.

我想說的是零售船舶，或者說我們稱之為OEM（原始設備製造商）方面，但總體而言，我們仍然聽到OEM合作夥伴表示，他們的業務積壓了多年的訂單，正在努力交付已訂購的船隻。因此，我們仍然看到OEM業務方面強勁的需求週期正在推進。

I show our next question comes from the line of Jeffrey Rand from Deutsche Bank.

我認為下一個問題來自德意志銀行的傑弗瑞‧蘭德 (Jeffrey Rand)。

How are the current inventory levels of your channel for your cycling business? And how do you think about end customer demand for cycling products through the rest of the year?

你們自行車業務通路目前的庫存水準如何？您認為今年剩餘時間終端客戶對自行車產品的需求如何？

I think in terms of inventory, it varies by product line, but the one that we've been talking about most is the indoor trainer inventory. Retailers do have a lot of inventory in the indoor training category, and they're selling through that, of course. And we also have inventory that we have in our warehouses that would go into the channel as soon as it kind of clears up. But that's a situation that's going to be around for a while. We don't expect it to improve quickly. So we're just going to have to be patient and work through that.

我認為庫存情況因產品線而異，但我們討論最多的是室內訓練器的庫存。零售商在室內訓練類別確實有很多庫存，當然，他們也在透過這些庫存進行銷售。我們倉庫裡也有一些庫存，一旦庫存清空，就會立刻進入通路。但這種情況還會持續一段時間。我們預計這種情況不會很快好轉。所以我們只能耐心等待，慢慢解決這個問題。

In terms of other categories, it really depends by geography, by retailer, by product line. But in general, we think channel inventory levels are reasonable, and we don't see any concern there.

至於其他品類，這實際上取決於地域、零售商和產品線。但整體而言，我們認為渠道庫存水準合理，無需擔心。

Great. And then operating margins in your auto OEM business were relatively flat sequentially. How do you think about operating margins for this business over the next few quarters as projects ramp up further?

太好了。那麼，你們汽車OEM業務的營業利潤率則是環比持平。隨著專案進一步增加，您認為未來幾季該業務的營業利潤率會如何？

Yes. I think in terms of what will happen going forward, as our deliveries increase, we will be able to experience scale in that business. So it should improve our overall operating margin performance, although we're not expecting that to swing to a positive number in the near term. But as we start to deliver the new products to BMW and as our production scale increases, it should generally improve.

是的。我認為就未來發展而言，隨著交付量的增加，我們將能夠體驗到該業務的規模經濟。因此，這應該會提高我們的整體營業利潤率，儘管我們預計短期內不會轉為正值。但隨著我們開始向BMW交付新產品，以及我們生產規模的擴大，整體利潤率應該會有所改善。

I show our next question comes from the line of Ben Bollin from Cleveland Research.

我認為我們的下一個問題來自克利夫蘭研究公司的 Ben Bollin。

A couple of questions. The first is, Cliff, could you talk a little bit about how you think of fitness and outdoor wearables? And how much of that business do you think is completely new buyers versus how much might be refresh of preexisting buyers? And then I had a follow-up.

有幾個問題。首先，克里夫，您能談談您對健身和戶外穿戴裝置的看法嗎？您認為這些業務中有多少是全新的買家，又有多少是現有買家的更新？然後我又問了一個後續問題。

Yes, thanks. I think in terms of the customer profile of our wearables, it really depends by product line and by segment. But at the highest level, if you look across all our wearables, we are mostly selling to brand-new customers to Garmin who are registering a new device for the first time and creating a Garmin Connect account. But we also have, of course, a sizable amount of business that we do with people who love to stay current on the latest products that we release. And so we see that side of the business as well. But right now, it's still more of an -- it's still a majority of people that are new to our wearables.

是的，謝謝。我認為，就我們穿戴式裝置的客戶群而言，這實際上取決於產品線和細分市場。但從最高層面來看，如果你縱觀我們所有的可穿戴設備，你會發現我們主要面向的是Garmin的新客戶，他們首次註冊新設備並創建了Garmin Connect帳戶。當然，我們也與那些喜歡關注我們最新產品的用戶開展了業務。我們也看到了這方面的業務。但目前，我們穿戴式裝置的大部分用戶仍然是新用戶。

Okay. The other different question, can you remind us on the revenue recognition methodology with BMW. How it may change as you go into the broader platform outside of China? And any thoughts on content opportunity?

好的。另一個問題是，您能否提醒我們BMW的收入確認方法？隨著BMW進軍中國以外的更廣大平台，這種方法可能會發生哪些變化？您對內容機會有什麼看法？

Yes. So as revenue recognition standpoint, probably shouldn't be that much different than we have at this point in time in the different models that come out from that standpoint -- from a revenue recognition standpoint.

是的。所以從收入確認的角度來看，可能與我們目前從這個角度得出的不同模型應該不會有太大差異。

Any thoughts on content going forward? As you get into more of these models, does that change the amount of dollar content per vehicle? Or is it similar with what you saw in China?

對未來的內容有什麼想法嗎？隨著你們對更多車型的投入，每輛車的內容成本會有所改變嗎？還是說情況和你們在中國看到的情況類似？

I think actually, Ben, the content per vehicle on the newer platforms that we're delivering is much higher per vehicle than what we're seeing on the current products delivered out of China as well as out of the U.S. factory here. In some cases, once we get to full production mode with BMW, they've adopted it across all of their platforms. Some vehicles could have 3 or more of these modules within the vehicle. So it will dramatically increase per vehicle based on what we're delivering over the long term to BMW.

Ben，我認為實際上，我們交付的新平台上每輛車的組件數量遠高於我們目前在中國以及美國工廠交付的產品。在某些情況下，一旦我們與寶馬全面合作，他們就會在所有平台上採用這種組件。有些車型可能配備三個或更多這樣的模組。因此，根據我們長期向寶馬交付的產品，每輛車的組件數量將大幅增加。

I show our next question comes from the line of Elizabeth Grenfell from Bank of America.

我認為下一個問題來自美國銀行的伊麗莎白格倫費爾 (Elizabeth Grenfell)。

As we think about the cycling business and the normalization that we're seeing, when do you expect it to completely have normalized? And at what level do you consider normal?

說到自行車產業以及我們所看到的正常化進程，您預計它什麼時候才能完全正常化？您認為正常化到什麼程度呢？

Yes, I think that's a very good question. During the first half of 2021, we saw elevated demands for all cycling products, including the indoor trainers where every factory -- and speaking broadly beyond just Garmin every factory and every manufacturer of those devices were delivering all that they could make to the market because of the demand. So the first half was very robust because of that really strong pandemic-driven demand and then that tailed off significantly in the second half. So we are expecting to see that those comps will improve starting in the second half and will probably take throughout the remainder of the year to really normalize.

是的，我認為這個問題問得很好。 2021年上半年，我們看到所有自行車產品的需求都在成長，包括室內自行車台。由於市場需求旺盛，每家工廠——廣義來說，不僅僅是佳明，每家工廠和每家此類設備的製造商都在盡最大努力地向市場供應產品。因此，由於疫情帶來的強勁需求，上半年的銷售非常強勁，但下半年的需求大幅下降。因此，我們預計這些產品的可比較價格將從下半年開始改善，並可能需要在今年剩餘時間內才能真正恢復正常。

In terms of the levels we're seeing, generally, we continue to see that the levels we're settling at for cycling products are in line with reasonable growth of the overall market over the past 2 to 3 years. So what that means is the CAGR is probably somewhere in the 5% to 10% range of the overall market, and it's settling in at some reasonable growth level over 2019 or even early 2020 type numbers.

就我們所觀察到的水平而言，總體而言，我們持續看到自行車產品的穩定水平與過去2到3年整體市場的合理成長保持一致。這意味著，複合年增長率可能在整體市場的5%到10%之間，並且與2019年甚至2020年初的數據相比，處於合理的成長水平。

(Operator Instructions) I show our next question comes from the line of Erik Woodring from Morgan Stanley.

（操作員指示）我表示我們的下一個問題來自摩根士丹利的艾瑞克‧伍德林。

Maybe just a few for me. Starting with one clarification question, Cliff. And Cliff, you mentioned earlier about channel inventory levels being reasonable. Was that just a fitness comment? Or was that a total company comment?

對我來說可能只有幾個問題。首先，我想先澄清一下，Cliff。 Cliff，您之前提到過渠道庫存水準合理。您剛才說的只是關於庫存狀況的評論嗎？還是整個公司都這麼說？

I would say total across all of our product lines that are popular in retail.

我想說的是，我們所有在零售業中受歡迎的產品線的總數。

Okay. And then in your -- in the prepared remarks, in the presentation deck, you made similar comments in outdoor, aviation, marine, calling out positive indicators. Any way that you can just maybe, for each of those markets, elaborate just a bit on what those positive indicators are?

好的。您在準備好的演講稿中，在簡報中，對戶外、航空、航海領域也做了類似的評論，列舉了正面的指標。您能否針對每個市場，稍微詳細說明一下這些正面的指標是什麼？

Well, I think if we just look at those one by one, I would say, in outdoor, our new product releases and the adventure watches are -- we continue to work to fill all of the demand that we're seeing for those. And in addition, there's some golf products that we've struggled to match the demand popularity of some of the products that we have there. So that's the outdoor side of things.

嗯，如果我們逐一來看，我想說，在戶外領域，我們發布的新產品和探險手錶——我們將繼續努力滿足所有市場需求。此外，我們還有一些高爾夫產品，我們一直在努力滿足現有產品的需求。這就是戶外方面的情況。

On the marine side of things, our new Panoptix LiveScope Plus system is extremely popular. And so we're working to fulfill a lot of back orders on that product, which also drives display systems. So there's kind of a broad-based demand in our marine segment because of that.

在船舶領域，我們全新的 Panoptix LiveScope Plus 系統非常受歡迎。因此，我們正在努力完成該產品的大量積壓訂單，這也推動了顯示系統的發展。因此，我們的船舶領域需求廣泛。

And then finally, in aviation, I think our biggest opportunity right now is the aftermarket side of things. We've been constrained because of the supply chain situation. And as I mentioned, we're starting to see that get better incrementally, but it will take some time to really fully recover. But the backlogs that we have there of things that we need to deliver is strong.

最後，在航空領域，我認為我們目前最大的機會在於售後市場。由於供應鏈狀況，我們一直受到限制。正如我所提到的，我們開始看到情況逐步好轉，但真正完全恢復還需要一些時間。不過，我們在這方面積壓的待交付訂單量很大。

Okay. Super helpful. And then one last question for me on outdoor. How much of the outperformance, so to speak, in 1Q was a result of sales being pushed from 4Q into 1Q? And then kind of second to that, were you able to fill the channel with all of your -- with all of the new products that you were -- that you launched in outdoor? Or is there still more to come, you'd say?

好的。非常有幫助。最後，關於戶外產品，我還有一個問題。第一季的出色表現，有多少是第四季的銷售被推遲到第一季帶來的？其次，你們在戶外產品領域推出的所有新產品是否都能涵蓋整個通路？或者說，你們還會推出更多新產品嗎？

I think most certainly, we tried to time the launch of the new products optimally, and we felt like it was not the best time to launch in late Q4. So there's probably some impact that shifted demand because people were waiting for our new products for sure. But it's hard to speculate on how much of that there was.

我認為，我們確實嘗試了最佳的新產品發佈時機，但我們認為在第四季末發布並非最佳時機。因此，由於人們肯定在等待我們的新產品，因此可能會對需求產生一些影響。但很難推測這種影響有多大。

And would you say your second part again?

您能再說一下您的第二部分嗎？

Yes. Just curious if you were able to get enough supply to fill the channel to your ideal levels for those new products launch in outdoor, if there is still more of that to come in the future, you'd say?

是的。我只是好奇，你們是否能夠獲得足夠的供應，以達到你們在戶外推出新產品的理想水平？未來是否還會有更多這樣的供應？

I think for our initial plan, we definitely were able to fill the channel. And what we found is that the reorders have continued to be strong. And so we're still chasing initial demand for that product line that we're working to fill.

我認為，就我們最初的計劃而言，我們絕對能夠滿足通路需求。而且我們發現，續訂量持續強勁。因此，我們仍在努力滿足該產品線的初始需求。

I'm showing no further questions in the queue. At this time, I would like to turn the call back over to Teri Seck, Director of Investor Relations, for closing remarks.

隊列中沒有其他問題了。現在，我想把電話轉回給投資人關係總監Teri Seck，請她做最後總結。

Okay, everyone. Thanks so much for your time. Doug and I are available for callbacks and have a great day.

好的，各位。非常感謝你們抽出時間。我和Doug隨時歡迎你們的回訪，祝你們有愉快的一天。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您可以掛斷電話了。