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Press Release
April 11, 2000
Research In Motion Reports Fourth Quarter And Year-End Results
Waterloo, Ontario - Research In Motion Limited (Nasdaq: RIMM, TSE: RIM), a leader in mobile communications, today reported fourth quarter and year end results for the periods ending February 29, 2000. (all figures in US $ and Canadian GAAP)
Revenue for the fourth quarter, fiscal 2000 was US $25.8 million representing an increase of 42% from revenue of US $18.2 million in the same period last year. Strong growth in BlackBerry sales accounted for the increase in quarterly revenues. BlackBerry™ accounted for 41% of total quarter revenues; RIM Wireless Handhelds and OEM radios accounted for 59%.
Net income for the quarter was US $3.2 million or US $0.05 per share basic and fully diluted compared with a net income of US $2.9 million or US $0.05 basic and fully diluted per share in the same quarter last year. For the year, net income was $10.5 million, or 12% of revenue. Earnings per share were $0.16 ($0.15 fully diluted) for the year, versus $0.10 ($0.10 fully diluted) for the prior year.
Revenue increased to US $85.0 million for the year ended February 29, 2000, representing an increase of 80% over the prior year. The increase was primarily due to the launch of the BlackBerry service and growth in RIM Wireless Handheld™ and OEM radio sales.
Gross research and development expenditures for the quarter were US $3.7 million compared to $3.3 million in the previous quarter. For the year, gross R&D expenditures were US $12.2 million as compared to $7.9 million in the previous year, which represents an increase of 54%.
Selling, marketing and administration expenses were US $5.1 million for the quarter compared to $3.5 million in the prior quarter. For the year, selling, marketing and administration expenses were $13.9 million. RIM increased expenditures to support BlackBerry, BellSouth and AMSC sales and distribution channels.
Cash, cash equivalents and marketable securities were US $218.2 million at February 29, 2000.
"Fiscal 2000 represented another year of significant growth for RIM" said Dennis Kavelman, Chief Financial Officer at Research In Motion. "Our revenue mix has changed substantially with the launch and growth of BlackBerry. The combination of hardware, software and ongoing service revenues provides a powerful recurring revenue model."
"Fiscal 2000 was a pivotal year for RIM and the mobile communications market" said Jim Balsillie, Chairman and Co-Chief Executive Officer. "With the launch of the new RIM 957 Wireless Handheld and the momentum behind BlackBerry and services from RIM partners, we expect Fiscal 2001 to be another exciting year."
Highlights in the fourth quarter include:
- Nortel Networks and RIM announced a strategic marketing and technology alliance to provide a new class of Wireless Internet services and connected computing appliances. These solutions will offer true 'wireless portals' for interaction between consumers, businesses and the Internet. In support of this alliance, Nortel also made a US$25 million equity investment in RIM.
- An agreement was reached with Compaq Computer Corporation to supply BlackBerry Exchange Edition to its customers as an important part of Compaq's end-to-end messaging solutions.
- America Online, Inc. (AOL) announced it has selected RIM two-way Internet appliances as an element of the AOL Mobile Messenger service. Through the agreement, AOL members and users of AOL Instant Messenger (AIM) will receive access to AOL email and AIM via a customized, AOL-branded, RIM handheld device.
- SkyTel, an MCI WorldCom company, launched a new wireless information service named SkyTel eLink, for the RIM 850 Wireless Handheld™.
- BellSouth Wireless Data and RIM announced the renewal of BellSouth's supply agreement for the RIM 950 Wireless Handheld™. RIM will supply 100,000 units to BellSouth Wireless Data with shipments scheduled to begin in April 2000. The agreement also detailed provisions to accommodate potential additional orders of the RIM 950™.
- Strategic alliances were announced with wireless security solution providers Certicom, Diversinet Corporation, Entrust Technologies and VeriSign, Inc. to enable RIM Wireless Handhelds to perform secure eCommerce transactions such as stock trades, online banking and other business and eCommerce transactions.
- OEM radio modem supply agreements were renewed with Lipman USA, Panasonic Personal Computer Company and Itronix Corporation. Each company will be taking advantage of RIM's newest OEM radio modem technology, the RIM 802D™ and RIM 902M™, announced in September 1999.
- RIM announced agreements with several large organizations such as Credit Suisse First Boston and Salomon Smith Barney to deploy BlackBerry Handhelds and BlackBerry Enterprise Servers within their organizations.
- RIM announced the opening of a new research and development facility located in Kanata, Ontario. The new R&D center will complement the growing engineering teams at RIM's headquarters in Waterloo, Ontario.
In January 2000, the BlackBerry Wireless Email Solution won the Product of the Year Award in the Mobile Computing category from InfoWorld Magazine for its simple set-up and deployment, ease-of-use and superior product functionality.
About RIM
Research In Motion Limited is a leading designer, manufacturer and marketer of innovative wireless solutions for the mobile communications market. Through development and integration of hardware, software and services, RIM provides solutions for seamless access to time-sensitive information including email, messaging, Internet and intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers in North America and around the world to enhance their products and services with wireless connectivity. RIM's portfolio of award-winning products includes the RIM Wireless Handheld™ product line, BlackBerry™ wireless email solution, wireless personal computer card adapters, embedded radio-modems and software development tools. Founded in 1984 and based in Waterloo, Ontario, RIM is listed on the Nasdaq Stock Market (Nasdaq: RIMM) and the Toronto Stock Exchange (TSE: RIM). Investors may contact investor_relations@rim.net. Customers may contact info@rim.net. Web sites: www.rim.net.
Research In Motion, RIM, the RIM logo, the RIM Wireless Handheld family of marks, RIM 802D, RIM 902M, BlackBerry, the BlackBerry logo, BlackBerry Exchange Edition and BlackBerry Internet Edition are trademarks of Research In Motion Limited. Research In Motion and RIM are registered with the U.S. Patent and Trademark Office. All other brands, products and company names mentioned herein may be trademarks or registered trademarks of their respective holders. Forward-looking statements in this news release are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, risks relating to possible product defects and product liability, risks related to international sales and potential foreign currency exchange fluctuations, risks related to the year 2000 issue, continued acceptance of RIM's products, increased levels of competition, technological changes, dependence on intellectual property rights and other risks detailed from time to time in RIM's periodic reports filed with the United States Securities and Exchange Commission and other regulatory authorities.
YEAR TO DATE CONSOLIDATED STATEMENT OF OPERATIONS
| For the year ended (in US$ thousands, except for earnings per share) | February 29, 2000 | February 28, 1999 |
| Revenue | $84,967 | $47,342 |
| Cost of Sales | 48,574 | 28,767 |
| 36,393 | 18,575 | |
| Research and development net of government assistance of $4,496 (1999-$3,539) | 7,738 | 4,382 |
| Selling, marketing and administration | 13,904 | 6,546 |
| Amortization | 4,683 | 2,783 |
| 26,325 | 13,711 | |
| Income from operations | 10,068 | 4,864 |
| Investment income | 5,968 | 3,790 |
| Income before provision for taxes | 16,036 | 8,654 |
| Provision for income taxes | 5,538 | 2,245 |
| Net income | $10,498 | 6,409 |
| Earnings per share, basic | $.16 | $.10 |
| Earnings per share, fully diluted | $.15 | $.10 |
See accompanying notes
QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS
| For the three months ended (in US$ thousands, except for earnings per share) (unaudited) | February 29, 2000 | February 28, 1999 |
| Revenue | $ 25,801 | $ 18,218 |
| Cost of sales | 15,534 | 11,372 |
| 10,267 | 6,846 | |
| Research and development, net of government assistance of $2,139 (1999-$ 1,372) | 1,587 | 719 |
| Selling, marketing and administration | 5,082 | 2,330 |
| Amortization | 1,706 | 901 |
| 8,375 | 3,950 | |
| Income from operations | 1,892 | 2,896 |
| Investment income | 2,995 | 832 |
| Income before provision for taxes | 4,887 | 3,728 |
| Provision for income taxes | 1,679 | 838 |
| Net income | $3,208 | $2,890 |
| Earnings per share, basic | $.05 | $.05 |
| Earnings per share, fully diluted | $.05 | $.05 |
See accompanying notes.
CONSOLIDATED BALANCE SHEET
| As at (in US$ thousands) | February 29, 2000 | February 28, 1999 |
| CURRENT ASSETS | ||
| Cash and cash equivalents | $126 | $9,618 |
| Marketable securities | 218,116 | 56,996 |
| Accounts recievable | 33,274 | 12,515 |
| Inventory | 36,852 | 19,812 |
| Prepaid expenses | 6,014 | 3,945 |
| 294,382 | 102,886 | |
| DEFERRED INCOME TAXES | 3,548 | - |
| CAPITAL ASSETS | 39,297 | 15,012 |
| TOTAL ASSETS | $337,227 | $117,898 |
| CURRENT LIABILITIES | ||
| Accounts payable and accrued liabilities | $11,033 | $7,764 |
| Taxes payable | 1,815 | 844 |
| Deferred revenue | 6,277 | 1,785 |
| Current portion of long-term debt | 185 | - |
| 19,310 | 10,393 | |
| LONG-TERM DEBT | 6,526 | - |
| SHAREHOLDERS' EQUITY | ||
| Common shares | 293,261 | 99,873 |
| Retained earnings | 18,130 | 7,632 |
| 311,391 | 107,505 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $337,227 | $117,898 |
| See accompanying notes. | | |
Notes to Consolidated Financial Statements
Note 1: BASIS OF PRESENTATION
During the year, the Company incorporated subsidiaries to hold investments in real property. All of the subsidiaries are wholly owned. The consolidated financial statements include the accounts of the subsidiaries with inter-company transactions and balances eliminated.
Note 2: CHANGE IN FUNCTIONAL AND REPORTING CURRENCY
The Company has historically measured and presented its consolidated financial statements in Canadian dollars. Effective September 1, 1999, as a result of the Company's increased economic activity in the U.S, the U. S. dollar has become the functional currency of the Company's operations. Effective the same date, the U. S. dollar has also been adopted as the reporting currency.
For periods up to and including August 31, 1999, the Canadian dollar financial statements of the Company have been restated into U.S. dollars, in accordance with accounting principles generally accepted in Canada, using the August 31, 1999 closing exchange rate being a rate of CDN $1.4888 per US $1.00.
Note 3: RECLASSIFICATION OF COMPARATIVE FIGURES
Comparative figures have been restated to U.S. dollars as disclosed in Note 2.
