Garmin (NASDAQ:GRMN) shareholders have had a tough year.

Shares of the GPS giant are down nearly 14% year-to-date, sharply under-performing the broader S&P 500. Some of that loss occurred on Wednesday, following the release of Garmin's first quarter earnings report.

GRMN Total Return Price Chart

GRMN Total Return Price data by YCharts

During its subsequent earnings call, Garmin CEO Cliff Pemble and CFO Doug Boessen offered some color on Garmin's business. Below are five of the most important quotes from that earnings call.

Garmin is ramping its investment in R&D
Garmin's operating margin declined during the quarter, falling to 26%. Pemble attempted to explain this drop during Garmin's earnings call, noting that the company was investing more heavily in its fitness R&D and advertising.

Operating margin was lower on a year-over-year basis, reflecting an increase in R&D and advertising investments during the quarter as planned. As you are aware, the fitness market is highly competitive and thus requires additional R&D investments in order to bring innovations to market faster.

Management doesn't fear the Apple Watch
Garmin's business still depends, primarily, on sales of its GPS units -- both to consumers and auto manufacturers -- but its fitness gadgets are increasingly crucial to the company's future. In the first quarter, Garmin's fitness segment generated 22% of its total sales, as consumers flocked to its activity trackers and fitness watches.

Competition in the space is intense. Garmin competes with a number of smaller upstarts, such as Jawbone and Fitbit, but also, increasingly, enormous tech giants. Apple's first wearable gadget, the Apple Watch, includes a number of fitness-related functions and a heart rate monitor. In time, Apple's gadget could threaten Garmin's fitness business. Yet Garmin's management is unconcerned. During the call, Boessen argued that Garmin's products exist in a different category than the Apple Watch. 

Our products are positioned differently than the Apple watch, and we appeal to a strong active lifestyles [sic].

Garmin plans to introduce fitness gadgets with wrist-based heart rate monitors
Apple isn't the only company offering a wrist-based heart rate monitor. Both Jawbone and Fitbit offer wrist-worn activity trackers with embedded heart rate sensors. Garmin, in contrast, has stuck with its more traditional chest strap. It's a more accurate solution, but obviously more cumbersome (who wants to wear a strap around under their shirt?). Dedicated athletes may prefer the strap, but less enthusiastic users could be swayed by the competition's offerings. Boessen, however, announced that the company was planning to offer wrist trackers of its own in the near future.

[Wrist-worn] heart rate is definitely a functionality that customers are embracing, and it's a differentiator for our competitors. We anticipate we'll close this gap in our product line in the near future.

It believes its next action camera will be more successful than the last
Garmin's Outdoor segment is composed of a wide variety of gadgets, including watches aimed at golfers and dog tracking solutions. One of the more intriguing product lines, however, may be its action cameras. In 2013, Garmin went after GoPro with its first action camera, the VIRB. Unfortunately for Garmin, the original VIRB was something of a failure -- it didn't take much market share, and many retailers didn't stock it.

But Garmin isn't giving up. It has two new cameras on the way, the VIRB X and the VIRB XE. During the call, Boessen explained why the company is more confident with its new cameras.

In terms of retailer interest in this product, we do see much more interest in this product than in our first VIRB, I think that the form factors appeals to people, the ability to use the product without a protective case is the differentiator...people are excited about the new enhancements we've made to our PC software and our mobile applications

No changes to its capital return philosophy
Garmin is a cash generating machine. During the quarter, it generated $63.5 million in free cash flow. Historically, Garmin has committed to returning nearly all of its free cash flow to its shareholders in the form of stock buybacks and dividends. But Garmin might be able to do more: it has about $2.7 billion in the bank.

But Garmin doesn't plan to go there -- at least not at this time. When asked, Pemble reiterated the company's commitment to its current policy.

I think at this moment, we're comfortable with the level [of cash] that's being returned....we feel like the current approach is adequate.