Research In Motion reports 45% sequential revenue growth in Q3
WATERLOO, ON, Dec. 20 /PRNewswire/ - Research In Motion Limited (RIM(R))
(Nasdaq: RIMM, TSE: RIM), a world leader in the mobile communications market,
today reported third quarter results for the three months ended November 30,
2000. (all figures in US $ and Canadian GAAP)
Revenue for the third quarter of fiscal 2001 was $61.6 million. This
marks a 45% increase over the prior quarter's revenue of $42.5 million and a
160% increase over the $23.7 million generated in the third quarter of last
year. BlackBerry(TM) subscriber growth continues to be a main revenue driver.
BlackBerry accounted for approximately 59% of the Company's quarterly revenue.
RIM Wireless Handhelds(TM) accounted for 35% and OEM radio modems accounted
for 6%.
"BlackBerry demand continues to ramp beyond our expectations," said Jim
Balsillie, Chairman and Co-CEO. "The market has accepted BlackBerry as the
clear leader in wireless email and we are working hard to ensure that we are
able to continue on our current growth path. Strong revenue growth and
execution of our business plan continue to be our key focus."
Net income for the quarter was $1.5 million ($0.02 per share basic and
fully diluted) compared with a net loss of $1.6 million in the prior quarter
and a net income of $3.2 million in the same quarter last year.
Gross research and development expenditures for the quarter were $6.7
million, or 11% of revenue, compared to $5.3 million in the prior quarter, or
13% of revenue, and $3.3 million, or 14% of revenue, in the third quarter last
year.
Selling, marketing and administration expenses were $16.9 million, or 27%
of revenue, for the quarter compared to $15.7 million, or 37% of revenue in
the previous quarter and $3.5 million, or 15% of revenue, in the third 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.
Cash, cash equivalents and marketable securities were $733.9 million at
November 30, 2000 as compared to $183.8 million in the previous quarter. A
completed offering of 6,000,000 common shares during the quarter, closing for
net proceeds of $585.3 million, accounted for the increase.
"The third quarter was successful by all accounts," said Dennis Kavelman,
Chief Financial Officer. "It demonstrated sustained revenue growth, execution
of key business objectives, as well as the completion of a significant
financing round intended to provide the resources necessary for RIM's next
growth stage. We are targeting continued growth in the fourth quarter and next
fiscal year."
Highlights of the third quarter:
- America Online, Inc. announced availability of AOL Mobile
Communicator(SM), which provides wireless access to AOL email and
instant messaging through RIM 950 Wireless Handheld(TM) technology.
- Following successful market tests earlier this year, EarthLink
announced its launch of the BlackBerry wireless email solution as a
kick off to the Company's EarthLink Everywhere initiative. America's
second largest Internet service provider, EarthLink brings the Internet
to more than 4.6 million subscribers.
- BellSouth Wireless Data renewed its reselling agreement with RIM with a
supply agreement for 150,000 RIM Wireless Handhelds(TM). As part of the
agreement, RIM also announced a distribution agreement to allow
BellSouth to directly offer BlackBerry to its corporate customers,
significantly expanding RIM's distribution for the BlackBerry solution.
- The RIM 857 Wireless Handheld(TM) was introduced for use over the
Motient wireless data network in the US and the Bell Mobility ARDIS
network in Canada. As part of the launch, RIM announced a new agreement
to supply 25,000 RIM 857 Wireless Handhelds and 25,000 RIM 850 Wireless
Handhelds(TM) to Motient. RIM also announced a supply agreement with
Bell Mobility.
- Paradigm4 announced it will resell the BlackBerry wireless email
solution including RIM's complete line of wireless handhelds. Paradigm4
plans to complement the BlackBerry solution with value-added services,
support and industry-specific application development, such as the "E-
Attach(4)" service (from Equinox Solutions Inc.) which allows users to
view email attachments on their BlackBerry Wireless Handheld.
- Information Builders and RIM announced a strategic alliance to jointly
market WebFOCUS-based applications integrated with BlackBerry. WebFOCUS
is an integrated suite of Business Intelligence tools through which
organizations can deliver information easily and instantly to
management, employees, customers, partners and vendors.
Highlights subsequent to quarter end:
- QUALCOMM and RIM announced a Code Division Multiple Access (CDMA)
subscriber unit license agreement. RIM was granted a license under
QUALCOMM's CDMA technology and patents to develop, manufacture and sell
subscriber products for CDMA and 1xEV wireless applications in North
America.
- RIM announced an expanded business relationship with Motient
Corporation, whereby RIM will resell Motient's wireless data network
services in conjunction with BlackBerry through RIM's distribution
channels. Fifty thousand BlackBerry subscribers are expected to be
added to the Motient network within the next 12 months. This sales
activity is incremental to RIM Wireless Handhelds sold through
Motient's distribution channel.
- Microcell Connexions Inc. and RIM announced a wholesale agreement
whereby RIM will purchase airtime and services from Microcell in order
to offer RIM Wireless Handheld service over the company's Canadian
General Packet Radio Service (GPRS) network.
- RIM announced the availability of BlackBerry to US Army representatives
through an agreement with Intelligent Decisions, a systems integrator
specializing in IT solutions for customers in the federal government,
including many in the intelligence community. BlackBerry will be
offered through Intelligent Decisions' Army Portable-3 contract, which
is available to the US Army, DoD agencies, and all Federal Civilian
agencies.
The replay of the company's Q3 conference call can be accessed after 8
p.m. (eastern time) December 20, 2000 until midnight (eastern time) December
27, 2000. It can be accessed by calling (416) 626-4100 and entering
reservation number 17280711. The conference will also appear on our web site,
live and archived, at rim.net.
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(TM) product line, the BlackBerry(TM)
wireless email solution, wireless personal computer card adapters, 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.
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.
QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended November 30 Fiscal 2001 Fiscal 2000
(in US$ thousands, except for earnings
per share)
-------------------------------------------------------------------------
(unaudited)
Revenue $61,629 $23,689
Cost of sales 37,925 12,853
-------------------------
23,704 10,836
-------------------------
Research and development, net of government
assistance of $1,998 (2000 -$407) 4,699 2,883
Selling, marketing and administration 16,860 3,505
Amortization 2,179 1,166
-------------------------
23,738 7,554
-------------------------
Income (loss) from operations (34) 3,282
Investment income 5,692 1,599
-------------------------
Income before provision for taxes 5,658 4,881
Provision for income taxes 4,162 1,700
-------------------------
Net income $1,496 $3,181
-------------------------
-------------------------
Earnings per share, basic $0.02 $0.05
Earnings per share, fully diluted $0.02 $0.05
-------------------------------------------------------------------------
See accompanying notes.
YEAR TO DATE CONSOLIDATED STATEMENT OF OPERATIONS
For the nine months ended November 30 Fiscal 2001 Fiscal 2000
(in US$ thousands, except for earnings
per share)
-------------------------------------------------------------------------
(unaudited)
Revenue $131,248 $59,166
Cost of sales 78,259 33,040
-------------------------
52,989 26,126
-------------------------
Research and development, net of government
assistance of $5,417 (2000 -$2,357) 11,140 6,151
Selling, marketing and administration 42,928 8,822
Amortization 5,433 2,977
-------------------------
59,501 17,950
-------------------------
Income (loss) from operations (6,512) 8,176
Investment income 11,684 2,973
-------------------------
Income before provision for taxes 5,172 11,149
Provision for income taxes 4,912 3,859
-------------------------
Net income $260 $7,290
-------------------------
-------------------------
Earnings per share, basic $0.00 $0.11
Earnings per share, fully diluted $0.00 $0.11
-------------------------------------------------------------------------
See accompanying notes.
CONSOLIDATED BALANCE SHEET
As at November 30, 2000 Fiscal 2001 Fiscal 2000
(in US$ thousands)
-------------------------------------------------------------------------
(unaudited)
CURRENT ASSETS
--------------
Cash and cash equivalents $653,671 $86,478
Marketable securities 80,217 131,168
Trade receivables 47,358 19,348
Other receivables 15,587 3,177
Inventory 58,951 26,333
Prepaid expenses 3,161 6,802
-------------------------
858,945 273,306
FUTURE INCOME TAX ASSETS 13,374 3,745
------------------------
INVESTMENTS 18,527 -
-----------
CAPITAL ASSETS 72,466 22,271
-------------- -------------------------
TOTAL ASSETS $963,312 $299,322
-------------------------
-------------------------
CURRENT LIABILITIES
-------------------
Accounts payable and accrued liabilities $36,243 $12,890
Taxes payable 2,106 2,101
Deferred revenue 9,836 2,398
Current portion of long-term debt 221 -
-------------------------
48,406 17,389
LONG-TERM DEBT 6,776 -
-------------- -------------------------
55,182 17,389
-------------------------
SHAREHOLDERS' EQUITY
--------------------
Common shares 889,741 267,012
Retained earnings 18,389 14,921
-------------------------
908,130 281,933
-------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $963,312 $299,322
-------------------------
-------------------------
See accompanying notes.
Notes to Consolidated Financial Statements
NOTE 1: BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the
subsidiaries with inter-company transactions and balances eliminated. All of
the subsidiaries are wholly owned.
NOTE 2: CHANGE IN FUNCTIONAL AND REPORTING CURRENCY
Prior to September 1, 1999, the Company had 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: CAPITAL STOCK
The following are the number of outstanding common shares, common share
purchase warrants and stock options at November 30:
Fiscal 2001 Fiscal 2000
----------- -----------
Common shares 77,836,836 70,211,624
Common share purchase warrants 214,000 214,000
Stock options 7,836,740 7,542,350
NOTE 4: RECLASSIFICATION OF COMPARATIVE FIGURES |
