Home > Newsroom > News > Financial Press Releases >
Press Release
April 29, 1999
Research In Motion Reports Record Results For Fiscal 1999
Waterloo, Ontario - Research In Motion Limited (NASDAQ: RIMM, TSE: RIM), a leader in wireless email and two-way wireless data communications, today reported record increases in both revenue and net income for the three months and year ended February 28, 1999. (All amounts are in Canadian dollars unless otherwise stated)
Net income for the fourth quarter of fiscal 1999 rose to $4.3 million (7 cents per share basic and fully diluted) compared to $2.0 million (4 cents per share basic and 3 cents fully diluted) in the corresponding quarter of fiscal 1998. Net income for fiscal 1999 was $9.5 million (15 cents basic and fully diluted) versus net income of $0.5 million (1 cent per share basic and fully diluted) in fiscal 1998.
Revenue for the most recently completed quarter increased 110% to $27.1 million compared to $12.9 million in the same three months of fiscal 1998. The Inter@ctive™ Pager 950 accounted for 85% of revenue in the quarter, while sales of radio modem products continued to grow and represented 15%. Government assistance has been offset against research and development expenditures rather than included in revenue. Revenue for fiscal 1999 of $70.5 million represented a 127% increase over the $31.1 million in revenue generated a year ago.
"The fourth quarter was significant for RIM in many ways," said Mike Lazaridis, RIM Co-CEO. "The launch of the BlackBerry™ service, numerous positive reviews and awards for the Inter@ctive Pager 950, and the general increase in awareness of wireless email and two-way messaging have all contributed to our momentum."
"What is notable about our fourth quarter and fiscal 1999 results is that we were profitable despite being in an early emerging market while devoting significant resources to research and development, marketing, brand awareness and increasing production capacity," said Jim Balsillie, Co-CEO. "Tightly executing our business plan and catalyzing market demand for our products are RIM's themes for fiscal 2000."
Gross profit in the fourth quarter of fiscal 1999 was $10.2 million or 38% of revenue versus $4.3 million (33% of revenue) in the corresponding period of fiscal 1998 and $10.8 million (41% of revenue) in the third quarter of this fiscal year. The year-over-year improvement resulted primarily from increased utilization in the manufacturing facility and volume pricing benefits derived from higher volumes. The slight decrease in gross profit from the third quarter of fiscal 1999 was primarily the result of exchange rate fluctuations. Gross profit in fiscal 1999 was $27.7 million (39% of revenue) compared to $9.6 million (31% of revenue) in the last fiscal year.
Enhanced sales channel development and heightened recruitment activities resulted in an increase in selling, marketing and administrative expenses. These expenses totaled $3.5 million in the fourth quarter of fiscal 1999, compared to $3.2 million in the third quarter of this fiscal year and $0.9 million in the corresponding period of fiscal 1998. Selling, marketing and administrative expenses for the year totalled $9.7 million, a 144% increase over the $4.0 million spent in fiscal 1998.
Gross research and development investments totalled $3.1 million ($1.1 million net of government assistance), compared to $2.9 million in the third quarter of fiscal 1999 ($2.0 million net) and $2.3 million in the corresponding quarter of fiscal 1998 ($1.6 million net). Gross research and development investments totalled $11.8 million for the year, an 82% increase over the $6.5 million spent in fiscal 1998.
Among recent highlights:
- In January 1999, RIM introduced BlackBerry - the first complete, secure, integrated, wireless email solution for the mobile professional. The BlackBerry mobile email solution includes a powerful wireless handheld with integrated email/organizer software, PC docking cradle, innovative desktop software, single mailbox integration with Microsoft Exchange and flat-rate airtime on nationwide wireless networks.
- The RIM Inter@ctive Pager will now be distributed by PageNet, the leading provider of wireless messaging products in the United States. PageNet plans to market the BellSouth Interactive Paging Service through its direct sales force and reseller channel. PageNet provides wireless messaging and information services to more than 10 million subscribers in North America.
- On April 7, 1999, American Mobile announced a strategic relationship with Skytel to pursue joint resale opportunities in the wireless data market. RIM has been shipping working prototype devices to American Mobile according to contracted milestones.
- On February 4, 1999, RIM began trading on the NASDAQ Stock Market under the symbol RIMM.
- RIM announced it has been selected to supply its wireless modem technology to The ADEMCO Group of Syosset, New York, the world's largest manufacturer of electronic security equipment.
- In February 1999, the RIM Inter@ctive Pager 950 received the Mobility Award for Wireless Hardware from Mobile Insights.
- In January 1999, Frost & Sullivan recognized Research In Motion for demonstrating excellence in product innovation in the paging market through the development of the RIM Inter@ctive Pager 950.
- In January 1999, the RIM Inter@ctive Pager 950 won the Best Pager Award for 1998 from Mobile Computing and Communications Magazine for its wide range of messaging options, intuitive user interface and small form factor.
- In December 1998, Andrew Seybold's Outlook recognized the RIM Inter@ctive Pager 950 as an important advance in mobile computing for its size, user-interface and functionality.
About Research In Motion
Research In Motion (RIM) 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 Inter@ctive™ Pager product line, the BlackBerry™ wireless email solution, wireless personal computer card adapters, embedded radio-modems and software development tools. A growth company, 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). Email: info@rim.net. Web site address: www.rim.net.
Research In Motion, RIM, the RIM logo, Inter@ctive, Inter@ctive Pager, BlackBerry and BlackBerry logo 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 harbour" 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 operations, 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.
QUARTERLY STATEMENT OF OPERATIONS
| For the three months ended February 28 (in thousands, except for earnings per share) | Fiscal 1999 | Fiscal 1998 |
| (unaudited) | (note 1) | |
| Revenue | $27,123 | $12,871 |
| Cost of sales | 16,930 | 8,598 |
| 10,193 | 4,273 | |
| Research and development, net of government assistance of $2,042 (1998 – $637) | 1,070 | 1,642 |
| Selling, marketing and administration | 3,469 | 883 |
| Amortization | 1,341 | 694 |
| 5,880 | 3,219 | |
| Income from operations | 4,313 | 1,054 |
| Investment income | 1,238 | 1,174 |
| Income before provision for taxes | 5,551 | 2,228 |
| Provision for income taxes | 1,248 | 264 |
| Net income | $4,303 | $1,964 |
| Earnings per share, basic | $.07 | $.04 |
| Earnings per share, fully diluted | $.07 | $.03 |
reclassified to conform to the current year’s presentation.
STATEMENT OF OPERATIONS
| For the year ended February 28 (in thousands, except for earnings per share) | Fiscal 1999 | Fiscal 1998 |
| (note 1) | ||
| Revenue | $70,483 | $31,118 |
| Cost of sales | 42,829 | 21,443 |
| 27,654 | 9,675 | |
| Research and development, net of government assistance of $5,269 (1998 – $2,041) | 6,524 | 4,444 |
| Selling, marketing and administration | 9,745 | 3,994 |
| Amortization | 4,144 | 2,192 |
| Interest on loans payable | - | 82 |
| 20,413 | 10,712 | |
| Income (loss) from operations | 7,241 | (1,037) |
| Investment income | 5,643 | 1,962 |
| Income before provision for taxes | 12,884 | 925 |
| Provision for income taxes | 3,343 | 385 |
| Net income | $9,541 | $540 |
| Earnings per share, basic | $ .15 | $ .01 |
| Earnings per share, fully diluted | $ .15 | $ .01 |
Note 1: Comparative figures have been
reclassified to conform to the current year’s presentation.
BALANCE SHEET
| As at February 28 (in thousands) | Fiscal 1999 | Fiscal 1998 |
| (note 1) | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | $14,320 | $96,008 |
| Marketable securities | 84,855 | 13,011 |
| Accounts receivable | 18,633 | 14,955 |
| Inventory | 29,496 | 15,398 |
| Prepaid expenses | 5,873 | 242 |
| 153,177 | 139,614 | |
| CAPITAL ASSETS | 22,350 | 13,733 |
| TOTAL ASSETS | $175,527 | $153,347 |
| CURRENT LIABILITIES | ||
| Accounts payable and accrued liabilities | $11,560 | $2,370 |
| Income taxes payable | 1,256 | 162 |
| Deferred revenue | 2,657 | 760 |
| 15,473 | 3,292 | |
| SHAREHOLDERS' EQUITY | ||
| Capital stock | 148,691 | 148,233 |
| Retained earnings | 11,363 | 1,822 |
| 160,053 | 150,055 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $175,527 | $153,347 |
STATEMENT OF CASHFLOWS
| For the year ended February 28 (in thousands) | Fiscal 1999 | Fiscal 1998 |
| (note 1) | ||
| CASH PROVIDED BY (USED IN) OPERATIONS</> | ||
| Net income for the year | $9,541 | $540 |
| Items not requiring an outlay of cash: | ||
| Amortization | 4,144 | 2,192 |
| 13,685 | 2,732 | |
| Net changes in non-cash working capital items | (11,226) | (2,423) |
| Total cash provided by operations | 2,459 | 309 |
| CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | ||
| Income tax reduction resulting from financing costs | 775 | 306 |
| Issuance of share capital | 73 | 116,890 |
| Financing costs | (390) | (8,059) |
| Government funding received for capital expenditures | 430 | 295 |
| Repayment of loans payable | - | (1,480) |
| Capital dividend paid | - | (390) |
| Total cash provided by financing activities | 888 | 107,562 |
| CASH USED IN INVESTING ACTIVITIES | ||
| Acquisition of capital assets | (13,191) | (8,328) |
| Acquisition of marketable securities | (115,576) | (13,011) |
| Proceeds on sale and maturity of marketable securities | 43,732 | - |
| Total cash used in investing activities | (85,035) | (21,339) |
| Increase (decrease) in cash and cash equivalents for the year | (81,688) | 86,532 |
| Cash and cash equivalents, beginning of the year | 96,008 | 9,476 |
| Cash and cash equivalents, end of the year | $14,320 | $96,008 |
Note 1: Comparative figures have been
reclassified to conform to the current year’s presentation.
