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Press Release
April 11, 2001
Research In Motion Reports $90.1 Million Revenue For Fourth Quarter and $221.3 Million For the Year
Waterloo, ON - Research In Motion Limited (RIM) (Nasdaq: RIMM, TSE: RIM), a world leader in the mobile communications market, today reported fourth quarter and year end results for the three months and fiscal year ended February 28, 2001. (all figures in US $ and Canadian GAAP)
Revenue for the fourth quarter of fiscal 2001 was $90.1 million. This marks a 46% increase over the prior quarter's revenue of $61.6 million and a 249% increase over the $25.8 million generated in the fourth quarter of last year. BlackBerry™ subscriber growth continues to be a main revenue driver. As well, shipments of RIM® Wireless Handhelds™ to AOL contributed to the significant growth. BlackBerry accounted for approximately 48% of the Company's quarterly revenue. RIM Wireless Handhelds accounted for 45% and OEM radio modems accounted for 7%.
Revenue increased to $221.3 million for the year ended February 28, 2001, representing an increase of 160% over the prior year. The increase for the year was primarily due to substantial growth in RIM Wireless Handheld shipments and BlackBerry subscribers. At the end of February there were approximately 164,000 BlackBerry subscribers in 7,800 companies.
"The results reported today mark the completion of another outstanding year for RIM," said Jim Balsillie, Chairman and Co-CEO. "BlackBerry continues its growth as the leading wireless email platform for the North American enterprise market; and we are well positioned for our entry to new international markets with next-generation products. We have the resources necessary to execute our business plan and extend our competitive lead; and we expect to repeat our success during the upcoming year."
Proforma net income for the quarter was $8.3 million or $0.11 per share ($0.10 diluted) compared with a net income of $1.5 million in the prior quarter and a net income of $3.2 million in the same quarter last year. For the year, proforma net income was $8.5 million or $0.12 per share ($0.11 diluted) compared to net income of $10.5 million or $0.16 per share ($0.14 diluted).
Due to macroeconomic and financial market conditions, several of RIM's long-term investments have experienced significant non-temporary declines in their value. As a result, RIM has taken a one-time write-down of $14.75 million. After accounting for this one-time write-down, the net loss for the quarter was $6.5 million ($0.08 per share). For the year, the net loss was $6.2 million ($0.08 per share).
Gross research and development expenditures for the quarter were $9.1 million, or 10% of revenue, compared to $6.7 million in the prior quarter, or 11% of revenue, and $3.7 million, or 14% of revenue, in the fourth quarter last year. For the year, gross R&D expenditures were $25.7 million as compared to $12.2 million in the previous year, which represents an increase of 110%. R&D expenditures, net of government funding, for the quarter were $7.1 million.
Selling, marketing and administration expenses were $22.3 million, or 25% of revenue, for the quarter compared to $16.9 million, or 27% of revenue in the previous quarter and $5.1 million, or 20% of revenue, in the fourth quarter of last year. Planned investments in BlackBerry marketing, co-operative marketing programs, and staffing increases in sales, marketing, and customer support have contributed to the increase. For the year, selling, marketing and administration expenses were $65.2 million.
Cash, cash equivalents and marketable securities were $721.9 million at February 28, 2001 as compared to $733.9 million in the previous quarter.
Highlights of the fourth quarter:
- RIM announced the appointment of Larry Conlee as Chief Operating Officer of Engineering and Manufacturing. Mr. Conlee joined RIM with over twenty years of international experience in corporate senior management at Motorola.
- RIM announced its first major European supply agreement for BlackBerry. Under the terms of the agreement, RIM will supply BT Cellnet with BlackBerry Enterprise Edition for distribution in the UK. The supply agreement includes an initial commitment from BT Cellnet to order 175,000 BlackBerry Wireless Handhelds with associated software and service.
- BlackBerry Enterprise Edition for Lotus® Domino™ was introduced. The announcement approximately doubles the number of enterprise customers that now have the ability to stay wirelessly connected to their corporate email through BlackBerry. It also marks the first wireless handheld solution to offer tight integration with Lotus Notes and Domino together with end-to-end security and 'Always On, Always Connected' operation.
- RIM and IBM joined forces to provide BlackBerry to companies internationally. IBM Global Services is adding BlackBerry-based solutions to its portfolio of wireless solutions and establishing a team to focus on the integration of BlackBerry with enterprise email and intranet backend systems. IBM will provide business consulting and design services, as well as systems integration services.
- Vaultus and RIM formed a strategic alliance to deliver wireless solutions that enable enterprise customers to reduce costs and gain greater sales efficiencies. Under the terms of the agreement, RIM will supply Vaultus a minimum of 50,000 BlackBerry Wireless Handhelds with associated software and services within the next two years.
- AvantGo and RIM announced a strategic alliance focused on delivering wireless Web-based data and corporate applications to Fortune 1000 customers. The companies will co-market existing and future products and services to enterprise customers and channel partners.
- The BlackBerry Wireless Email Solution was added to several government purchasing contracts including the U.S. government GSA schedule.
- Kasten Chase and RIM announced an agreement focused on providing secure wireless access to the U.S. Government's Defense Message System (DMS) via BlackBerry. The integrated RASP Data Security/BlackBerry solution will be designed to meet government standards for remote access to DMS. Kasten Chase will also market the solution to government end-user organizations and select BlackBerry government resellers.
- E*TRADE launched its integrated brokerage and banking solution on the award-winning RIM Wireless Handhelds.
- BlackBerry Enterprise Edition for Lotus Domino received the Gold Award from Lotus Advisor magazine. RIM Wireless Handhelds also received top awards from eWeek magazine and Smart Business magazine.
Highlights subsequent to quarter end:
- RIM announced another major breakthrough in wireless enterprise applications with the introduction of wireless calendar support for BlackBerry. With wireless calendar synchronization, BlackBerry Enterprise Server and BlackBerry Wireless Handhelds exchange calendar events wirelessly and securely. The user's online calendar and handheld calendar are automatically synchronized over-the-air without need of a cradle.
- GoAmerica and RIM announced that Go.Web™ version 6.0 will be bundled with BlackBerry. Go.Web 6.0 includes enhanced features for mobile access to web and corporate information.
- The BlackBerry Wireless Handheld was awarded the FIPS 140-1 Validation for its embedded encryption technology by the National Institute of Standards and Technology (NIST). FIPS 140-1 Validation is an important, and often mandatory, purchasing criteria for many organizations and will help facilitate continued adoption of BlackBerry in the government sector.
- Wynd Communications and RIM demonstrated the WyndTell accessibility solution at the FOSE 2001 show. WyndTell with RIM Wireless Handhelds is designed to meet the needs of people who are deaf or hard of hearing by enabling users to communicate using two-way technology.
- Yahoo! and Motient added RIM 857 Wireless Handheld support allowing wireless access to Yahoo! content and services via Motient's wireless data network.
- Lucent Technologies and RIM announced an alliance focused on accelerating commercialization of third generation (3G) mobile solutions. Lucent and RIM will cooperate in interoperability testing for next-generation networks and coordinate trials with mobile network operators around the world.
- RIM has signed memoranda of understanding with two additional European carriers to offer BlackBerry to their corporate customers. Esat Digifone (in Ireland) and Telfort Mobiel B.V. (in The Netherlands) are deploying a nation-wide GPRS network in its respective country that will support the BlackBerry wireless email solution.
About Research In Motion
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 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, the BlackBerry™ wireless email solution, embedded radio-modems and software development tools. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in Canada, the United States and England. RIM is listed on the Nasdaq Stock Market (Nasdaq: RIMM) and the Toronto Stock Exchange (TSE: RIM). For more information, visit www.rim.net. Investors may contact investor_relations@rim.net. Customers may contact info@rim.net.
For more information:
Contact RIM Investor Relations at (519) 888-7465 or investor_relations@rim.net
Research In Motion, RIM, the RIM logo, the RIM Wireless Handheld family of marks, BlackBerry and the BlackBerry logo are trademarks of Research In Motion Limited. Research In Motion, RIM and 'Always On, Always Connected' 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, 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.
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding one-time write-down of long-term investments of $14.75 million
| For the three months ended | For the year ended | |||
| (in US $000's, except for proforma earnings per share) | February 28, 2001 | February 29, 2000 | February 28, 2001 | February 29, 2000 |
| (unaudited) | ||||
| Revenue | $ 90,079 | $ 25,801 | $ 221,327 | $ 84,967 |
| Cost of sales | 55,593 | 15,534 | 133,852 | 48,574 |
| | ||||
| Gross margin | 34,486 | 10,267 | 87,475 | 36,393 |
| | ||||
| Research and development | 7,141 | 1,587 | 18,281 | 7,738 |
| Selling, marketing and administration | 22,272 | 5,082 | 65,200 | 13,904 |
| Amortization | 3,212 | 1,706 | 8,645 | 4,683 |
| | ||||
| 32,625 | 8,375 | 92,126 | 26,325 | |
| | ||||
| Income (loss) from operations | 1,861 | 1,892 | (4,651) | 10,068 |
| Investment income | 11,238 | 2,995 | 22,921 | 5,968 |
| | ||||
| Income before provision for income taxes | 13,099 | 4,887 | 18,270 | 16,036 |
| Provision for income taxes | 4,819 | 1,679 | 9,731 | 5,538 |
| | ||||
| Proforma net income | $ 8,280 | $ 3,208 | $ 8,539 | $ 10,498 |
| | ||||
| Proforma earnings per share, basic | $ 0.11 | $ 0.05 | $ 0.12 | $ 0.16 |
| Proforma earnings per share, diluted | $ 0.10 | $ 0.04 | $ 0.11 | $ 0.14 |
| | ||||
| Weighted average number of common shares outstanding (000's) | ||||
| Basic | 78,012 | 70,535 | 73,555 | 66,613 |
| Diluted | 84,044 | 77,225 | 79,586 | 72,996 |
| | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the three months ended | For the year ended | |||
| (in US $000's, except for earnings (loss) per share) | February 28, 2001 | February 29, 2000 | February 28, 2001 | February 29, 2000 |
| (unaudited) | ||||
| Revenue | $ 90,079 | $ 25,801 | $ 221,327 | $ 84,967 |
| Cost of sales | 55,593 | 15,534 | 133,852 | 48,574 |
| | ||||
| Gross margin | 34,486 | 10,267 | 87,475 | 36,393 |
| | ||||
| Research and development | 7,141 | 1,587 | 18,281 | 7,738 |
| Selling, marketing and administration | 22,272 | 5,082 | 65,200 | 13,904 |
| Amortization | 3,212 | 1,706 | 8,645 | 4,683 |
| | ||||
| 32,625 | 8,375 | 92,126 | 26,325 | |
| | ||||
| Income (loss) from operations | 1,861 | 1,892 | (4,651) | 10,068 |
| Investment income | 11,238 | 2,995 | 22,921 | 5,968 |
| | ||||
| Income before write-down of long-term investments and provision for income taxes | 13,099 | 4,887 | 18,270 | 16,036 |
| Write-down of long-term investments | 14,750 | - | 14,750 | - |
| Income (loss) before provision for income taxes | (1,651) | 4,887 | 3,520 | 16,036 |
| Provision for income taxes | 4,819 | 1,679 | 9,731 | 5,538 |
| | ||||
| Net income (loss) | $ (6,470) | $ 3,208 | $ (6,211) | $ 10,498 |
| | ||||
| Earnings (loss) per share, basic | $ (0.08) | $ 0.05 | $ (0.08) | $ 0.16 |
| Earnings (loss) per share, diluted | $ (0.08) | $ 0.04 | $ (0.08) | $ 0.14 |
| | ||||
| Weighted average number of common shares outstanding (000's) | ||||
| Basic | 78,012 | 70,535 | 73,555 | 66,613 |
| Diluted | 84,044 | 77,225 | 79,586 | 72,996 |
| | ||||
CONSOLIDATED BALANCE SHEETS
| As at (in US $000's) | February 28, 2001 | February 29, 2000 | ||
| | ||||
| Current assets | ||||
| Cash and cash equivalents | $ 508,822 | $ 126 | ||
| Marketable securities | 213,105 | 218,116 | ||
| Trade receivables | 50,268 | 27,239 | ||
| Other receivables | 13,894 | 6,035 | ||
| Inventory | 68,044 | 36,852 | ||
| Prepaid expenses | 2,932 | 6,014 | ||
| | ||||
| 857,065 | 294,382 | |||
| Capital assets | 95,208 | 39,297 | ||
| Investments | 5,779 | - | ||
| Future income tax assets | 12,011 | 3,548 | ||
| | ||||
| $ 970,063 | $ 337,227 | |||
| | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilities | $ 45,892 | $ 11,033 | ||
| Taxes payable | 3,842 | 1,815 | ||
| Deferred revenue | 10,870 | 6,277 | ||
| Current portion of long-term debt | 198 | 185 | ||
| | ||||
| 60,802 | 19,310 | |||
| Long-term debt | 6,328 | 6,526 | ||
| | ||||
| 67,130 | 25,836 | |||
| | ||||
| Shareholders' equity | ||||
| Common shares | 891,014 | 293,261 | ||
| Retained earnings | 11,919 | 18,130 | ||
| | ||||
| 902,933 | 311,391 | |||
| | ||||
| $ 970,063 | $ 337,227 | |||
| | ||||
