Press Release

June 28, 2007

Research In Motion Reports First Quarter Results

RIM Prepares To Ship 20 Millionth BlackBerry Handset

Waterloo, ON - Research In Motion Limited (RIM) (Nasdaq: RIMM; TSX: RIM), a world leader in the mobile communications market, today reported first quarter results for the three months ended June 2, 2007 (all figures in U.S. dollars and U.S. GAAP).

Revenue for the first quarter of fiscal 2008 was $1.082 billion, up 16.3% from $930.4 million in the previous quarter and up 76.5% from $613.1 million in the same quarter of last year. The revenue breakdown for the quarter was approximately 76% for devices, 16% for service, 5% for software and 3% for other revenue.   During the quarter, RIM shipped approximately 2.4 million devices.

The total number of BlackBerry subscriber accounts in the quarter increased by approximately 1.2 million to over 9 million total subscriber accounts.

“We are starting fiscal 2008 with strong operating performance, including record revenue, earnings and subscriber results," said Jim Balsillie, Co-CEO at RIM. "After completing our first billion dollar quarter, we are now preparing to ship the 20 millionth BlackBerry handset this summer. This growth is a testament to our strong portfolio of products and services and our successful channel expansion. We look forward to the remainder of the year in which we anticipate continued growth within both North American and international markets.”

GAAP net income for the quarter was $223.2 million, or $1.17 per share diluted, as compared with net income of $187.4 million, or $0.98 per share diluted, in the prior quarter.  Adjusted net income excluding stock option expense of $5.3 million was $228.5 million, or $1.20 per share diluted.  The adjusted net income and earnings per share do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other issuers.  These adjusted measures should be considered in the context of RIM’s GAAP results. This is the last quarter that RIM will be reporting net income and earnings per share adjusted for stock option expense.

Revenue for the second quarter of fiscal 2008 ending September 1, 2007 is expected to be in the range of $1.3-$1.365 billion.  Subscriber account additions in the second quarter are expected to be in the range of 1.325-1.375 million.  GAAP earnings per share for the second quarter are expected to be in the range of $1.37-$1.49 diluted or 45-49 cents per share diluted on a post-split basis, factoring the effective 3-for-1 stock split announced separately today. 

The total of cash, cash equivalents, short-term and long-term investments was $1.56 billion as at June 2, 2007, compared to $1.41 billion at the end of the previous quarter, an increase of $150 million over the prior quarter.
 
Highlights of the First Quarter:

• RIM opened new BlackBerry APIs to support growth in mobile applications.
• RIM announced the BlackBerry Mobile Voice System (BlackBerry MVS) for seamless enterprise voice integration.
• RIM announced a new BlackBerry application suite for Windows Mobile-based devices.
• RIM announced the BlackBerry Plug-in for Microsoft Visual Studio.
• RIM hosted the sixth annual Wireless Enterprise Symposium.
• AT&T launched the red BlackBerry Pearl and the BlackBerry Curve in the U.S.
• Verizon Wireless launched the BlackBerry 8830 World Edition in the U.S.
• T-Mobile USA launched the BlackBerry 8800 in the U.S.
• SunCom launched BlackBerry Pearl in the U.S.
• Cincinnati Bell launched the BlackBerry Pearl in the U.S.
• Rogers launched the red BlackBerry Pearl and the BlackBerry Curve in Canada.
• Bell Mobility announced the BlackBerry 8830 World Edition in Canada.
• O2 launched the BlackBerry Curve in the UK.
• Vodafone launched the BlackBerry Curve in the UK and Spain.
• Telefónica launched the BlackBerry Curve in Spain.
• Bouygues Telecom launched the BlackBerry Curve in France.
• T-Mobile launched the BlackBerry Curve in Germany and Austria.
• SFR launched the BlackBerry 8800 in France.
• Orange launched the BlackBerry 8800 in Poland, Romania and Slovakia.
• Proximus launched the BlackBerry 8800 in Belgium.
• TIM launched the white BlackBerry Pearl and the BlackBerry 8800 in Italy.
• TDC launched the BlackBerry Pearl in Denmark.
• Globul launched the BlackBerry 8707g and the BlackBerry Pearl in Bulgaria.
• TMN launched the BlackBerry Pearl in Portugal.
• Mobitel launched BlackBerry Internet Service in Slovenia.
• Manx Telecom launched BlackBerry in Isle of Man.
• MTC-Vodafone launched the BlackBerry Pearl and the BlackBerry 8707v in Bahrain.
• Fastlink launched the BlackBerry Pearl in Jordan.
• MTN launched the BlackBerry Enterprise Solution in Nigeria.
• Mobily launched the BlackBerry Pearl in the Kingdom of Saudi Arabia.
• MTC launched BlackBerry in Kuwait.
• Meditel launched BlackBerry in Morocco.
• Nextel launched BlackBerry in Argentina and Brazil.
• Telefónica Movistar launched the BlackBerry Curve in Chile.
• TIM launched the BlackBerry Pearl in Brazil.
• Telefónica Movistar launched the BlackBerry Pearl and the BlackBerry 8800 in Argentina and Colombia.
• Telefónica Movistar launched the BlackBerry Pearl in Venezuela, Panama, Nicaragua, Salvador and Guatemala.
• Telcel launched the white and red BlackBerry Pearl in Mexico.
• Claro launched the white BlackBerry Pearl in Brazil and Peru.
• Comcel launched the white BlackBerry Pearl in Colombia.
• CTI launched the white BlackBerry Pearl in Argentina.
• Porta launched the white BlackBerry Pearl in Ecuador.
• Entel launched the BlackBerry Pearl in Bolivia.
• TIM launched the BlackBerry Pearl in Brazil.
• Cable and Wireless launched the BlackBerry Pearl and the BlackBerry 8800 in the Caribbean.
• M3 launched the BlackBerry Pearl and the BlackBerry 8800 in Bermuda.
• UTS  launched the BlackBerry Pearl and the BlackBerry 8800 in Curacao and St. Martin.
• Setar  launched the BlackBerry Pearl in Aruba.
• Digicel launched BlackBerry service in Guyana.
• Digicel launched the BlackBerry 8800 in the Caribbean.
• Hutch launched the BlackBerry 8800 in India.
• Airtel launched the BlackBerry 8800 in India.
• StarHub launched the BlackBerry 8800 in Singapore.
• SingTel launched the BlackBerry 8800 in Singapore.
• 3Hong Kong launched the BlackBerry 8800 in Hong Kong.
• CSL launched the BlackBerry 8800 and the white BlackBerry Pearl in Hong Kong.
• SmarTone Vodafone launched the BlackBerry 8800 in Hong Kong.
• Peoples launched the BlackBerry 8800 in Hong Kong.
• Telstra launched the BlackBerry 8800 in Australia.
• Optus launched the BlackBerry 8800 in Australia.
• Vodafone launched the BlackBerry 8800 in Australia.
• Smart launched the BlackBerry 8800 in the Philippines.
• Dopod International launched BlackBerry Connect v4.0.
• BlackBerry ISV Alliance members continued to build upon the BlackBerry platform with a range of new products and services that help customers extend their wireless data strategies beyond wireless email.

Highlights Subsequent to Quarter End:
• Sprint launched the BlackBerry 8830 World Edition in the U.S.
• O2 launched the BlackBerry Curve in Ireland.
• KPN launched the BlackBerry Curve in The Netherlands.
• Sentel GSM launched BlackBerry in Senegal.
• Comcel launched the BlackBerry 8800 and the red BlackBerry Pearl in Colombia.
• CTI launched the red BlackBerry Pearl in Argentina.
• Claro launched the red BlackBerry Pearl in Peru and Guatemala.
• Porta launched the red BlackBerry Pearl in Ecuador.
• Digicel launched the BlackBerry Curve in the Caribbean and El Salvador.
• BTC launched the BlackBerry Pearl in Bahamas.
• Telefónica Movistar launched the BlackBerry Pearl in Brazil and Mexico.
• Entel PCS launched the BlackBerry 8800 in Chile.
• DoCoMo Announced Japanese Text Input Support for BlackBerry.
• 3Hong Kong launched the red BlackBerry Pearl in Hong Kong.
• Celcom launched the BlackBerry Pearl in Malaysia.

The replay of the company’s Q1 conference call can be accessed after 7 p.m. (eastern), June 28, 2007 until midnight (eastern), July 12, 2007.  It can be accessed by dialing 416-640-1917 and entering passcode 21221686#.   The conference will also appear on the RIM web site, live at 5:00 pm (eastern) and archived at http://www.rim.com/investors/events/index.shtml until midnight August 2, 2007.

About Research In Motion (RIM)
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, Internet and intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity. RIM’s portfolio of award-winning products, services and embedded technologies are used by thousands of organizations around the world and include the BlackBerry® wireless platform, the RIM Wireless Handheld™ product line, software development tools, radio-modems and software/hardware licensing agreements. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe and Asia Pacific. RIM is listed on the Nasdaq Stock Market (Nasdaq: RIMM) and the Toronto Stock Exchange (TSX: RIM). For more information, visit www.rim.com or www.blackberry.com.

This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws relating to RIM’s revenue and earnings expectations for the second quarter of fiscal 2008, anticipated growth in subscribers, anticipated gains in market share and growth during the current fiscal year, and plans relating to RIM and its carrier partners. The terms and phrases “anticipate”, “continued”, “continuing to”, “expected”, and similar terms and phrases are intended to identify these forward-looking statements.  Forward-looking statements are based on estimates and assumptions made by RIM in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that RIM believes are appropriate in the circumstances.  Many factors could cause RIM’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: risks relating to RIM’s intellectual property rights; risks related to RIM’s review of its historical option granting practices, the restatement of its previously filed financial statements as a result of the review, and regulatory investigations and litigation relating to these matters; RIM’s ability to enhance current products and develop new products; RIM’s reliance on carrier partners, third-party network developers and suppliers; and intense competition.  These risk factors and others relating to RIM are discussed in greater detail in the “Risk Factors” section of RIM’s Annual Information Form, which is included in its Annual Report on Form 40-F (copies of which filings may be obtained at www.sedar.com or www.sec.gov) and RIM’s other public filings with the Securities and Exchange Commission and Canadian securities regulators.  These factors should be considered carefully, and readers should not place undue reliance on RIM’s forward-looking statements.  RIM has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited.  RIM, Research In Motion and BlackBerry are registered with the U.S. Patent and Trademark Office and may be pending or registered in other countries.  All other brands, product names, company names, trademarks and service marks are the properties of their respective owners.

Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data)

Consolidated Statements of Operations

  For the three months ended
  June 2, 2007 March 3, 2007 June 3, 2006
 
        (Restated)
Revenue $ 1,081,911 $ 930,393 $ 613,116
Cost of sales 521,841 433,035 275,388
 
Gross margin 560,070 497,358 337,728
 
Gross Margin % 51.8% 53.5% 55.1%
   
Expenses      
  Research and development 74,934 67,321 51,822
  Selling, marketing and administration 177,483 167,112 107,958
  Amortization 23,795 22,021 16,071
 
  276,212 256,454 175,851
 
   
Income from operations 283,858 240,904 161,877
   
  Investment income 16,447 14,794 12,051
 
Income before income taxes 300,305 255,698 173,928
 
   
Provision for income taxes      
  Current 130,166 33,232 9,234
  Deferred (53,081) 35,082 35,850
 
  77,085    68,314 45,084
 
Net income $ 223,220 $ 187,384 $ 128,844
 
   
Earnings per share      
 Basic $ 1.20 $ 1.01 $ 0.69
 
 Diluted $ 1.17 $ 0.98 $ 0.67
 
   
Weighted average number of common shares outstanding (000’s)      
 Basic 185,951 185,741 186,282
 Diluted 190,354 190,253 192,026
   


Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data)

Consolidated Balance Sheets

As at June 2, 2007 March 3, 2007
   
Assets    
  Current    
  Cash and cash equivalents $ 712,244 $ 677,144
  Short-term investments 456,372 310,082
  Trade receivables 718,357 572,637
  Other receivables 57,560 40,174
  Inventory 258,655 255,907
  Other current assets 86,373 41,697
  Deferred income tax asset 51,825 21,624
 
  2,341,386 1,919,265
   
     
Investments 394,138 425,652
Capital assets 524,639 487,579
Intangible assets 139,754 138,182
Goodwill 109,932 109,932
Deferred income tax asset 5,667 8,339
 
  $ 3,515,516 $ 3,088,949
 
     
Liabilities    
  Current    
  Accounts payable $ 189,945 $ 130,270
  Accrued liabilities 365,379 287,629
  Income taxes payable 106,801 99,958
  Deferred revenue 34,353 28,447
  Current portion of long-term debt 304 271
 
  696,782 546,575
   
Long-term debt 6,895 6,342
Deferred income tax liability 43,962 52,532
Income taxes payable 28,297 -
 
  775,936 605,449
 
   
     
Shareholders’ Equity    
Capital stock 2,104,068 2,099,696
Retained earnings 582,447 359,227
Paid-in capital 42,158 36,093
Accumulated other comprehensive income (loss) 10,907 (11,516)
 
  2,739,580 2,483,500
 
  $ 3,515,516 $ 3,088,949
 


Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data)

Consolidated Statements of Cash Flows

  For the three months ended
  June 2, 2007 June 3, 2006
 
      (Restated)
Cash flows from operating activities    
Net income $ 223,220 $ 128,844
     
Items not requiring an outlay of cash:    
  Amortization 37,716 26,809
  Deferred income taxes (48,795) 33,205
  Income taxes payable 28,297 -
  Share-based compensation 5,300 4,984
  Other 3,047 (913)
Net changes in working capital items (23,487) (93,901)
 
     
Net cash provided by operating activities 225,298 99,028
 
     
Cash flows from financing activities    
Issuance of share capital 3,737 10,320
Excess tax benefits from share-based compensation 1,400 -
Repayment of long-term debt (66) (63)
 
Net cash provided by financing activities 5,071 10,257
 
     
Cash flows from investing activities    
Acquisition of investments (114,807) (5,100)
Proceeds on sale or maturity of investments 25,321 17,880
Acquisition of capital assets (66,753) (44,065)
Acquisition of intangible assets (9,739) (22,091)
Business acquisitions - (38,878)
Acquisition of short-term investments (287,758) (778)
Proceeds on sale and maturity of short-term investments 260,718 79,987
 
Net cash used in investing activities (193,018) (13,045)
 
     
Effect of foreign exchange (loss) gain on cash and cash equivalents (2,251) 1,094
 
     
Net increase in cash and cash equivalents for the period 35,100 97,334
Cash and cash equivalents, beginning of period    677,144 459,540
 
Cash and cash equivalents, end of period $ 712,244 $ 556,874
 
     
As at June 2, 2007 March 3, 2007
 

 
Cash and cash equivalents $  712,244 $ 677,144
Short-term investments 456,372 310,082
Investments 394,138 425,652
 
  $ 1,562,754 $ 1,412,878