1121788--3/7/2006--GARMIN

related topics

{customer, product, revenue}

{stock, price, operating}

{product, market, service}

{regulation, change, law}

{operation, international, foreign}

{capital, credit, financial}

{acquisition, growth, future}

{provision, law, control}

{competitive, industry, competition}

{property, intellectual, protect}

{personnel, key, retain}

{stock, price, share}

{product, liability, claim}

{cost, regulation, environmental}

Risks Related to the Company Our Global Positioning System products depend upon satellites maintained by the United States Department of Defense. If a significant number of these satellites become inoperable, unavailable or are not replaced or if the policies of the United States government for the use of the Global Positioning System without charge are changed or if there is interference with Global Positioning System signals, our business will suffer. A shut down of U.S. airspace or imposition of restrictions on general aviation would harm our business. Any reallocation of radio frequency spectrum could cause interference with the reception of Global Positioning System signals. This interference could harm our business. If we are not successful in the continued development, introduction or timely manufacture of new products, demand for our products could decrease. If we do not correctly anticipate demand for our products, we may not be able to secure sufficient quantities or cost-effective production of our products or we could have costly excess production or inventories. We may become subject to significant product liability costs. We depend on our suppliers, some of which are the sole source for specific components, and our production would be seriously harmed if these suppliers are not able to meet our demand and alternative sources are not available, or if the costs of components rise. We rely on independent dealers and distributors to sell our products, and disruption to these channels would harm our business. Failure to manage our growth and expansion effectively could adversely impact our business. Our business may suffer if we are not able to hire and retain sufficient qualified personnel or if we lose our key personnel. Our sales and gross margins for our products may fluctuate or erode. Our quarterly operating results are subject to fluctuations and seasonality. Our quarterly financial statements will reflect fluctuations in foreign currency translation. If we are unable to compete effectively with existing or new competitors, our resulting loss of competitive position could result in price reductions, fewer customer orders, reduced margins and loss of market share. Our intellectual property rights are important to our operations, and we could suffer loss if they infringe upon other s rights or are infringed upon by others. Failure to obtain required certifications of our products on a timely basis could harm our business. Our business is subject to economic, political and other risks associated with international sales and operations. We may experience unique economic and political risks associated with companies that operate in Taiwan. There is uncertainty as to our shareholders ability to enforce certain foreign civil liabilities in the Cayman Islands and Taiwan. Our shareholders may face difficulties in protecting their interests because we are incorporated under Cayman Islands law. We may pursue strategic acquisitions, investments, strategic partnerships or other ventures, and our business could be materially harmed if we fail to successfully identify, complete and integrate such transactions. We have benefited in the past from Taiwan government tax incentives offered on certain high technology capital investments that may not always be available. Changes in our United States federal income tax classification or in applicable tax law could result in adverse tax consequences to our shareholders. Risks Relating to Our Shares The volatility of our stock price could adversely affect investment in our common shares. Our officers and directors exert substantial influence over us. Provisions in our shareholder rights plan and our charter documents might deter, delay or prevent a third party from acquiring us and Cayman Islands corporate law may impede a takeover, which could decrease the value of our shares.

Full 10-K form ▸

1121788--3/7/2006--GARMIN_LTD