Research In Motion Reports Year-End and Fourth Quarter Results for Fiscal 2010
Mar 31, 2010 16:15 ET
WATERLOO, ONTARIO--(Marketwire - March 31, 2010) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported results for the three months and fiscal year ended February 27, 2010 (all figures in U.S. dollars and U.S. GAAP).
Annual Highlights:
-- Revenue grew 35% over the prior fiscal year to $15 billion
-- BlackBerry® subscriber account base grew 65% over the prior fiscal
year to over 41 million, with a record 4.9 million net new subscriber
accounts added in Q4
-- BlackBerry smartphone shipments grew more than 40% over the prior fiscal
year to 37 million
-- BlackBerry was the number one selling smartphone brand in the United
States at the end of calendar 2009(1)
-- GAAP earnings per share grew 30% over the prior fiscal year to $4.31 per
share diluted
Revenue for the fiscal year ended February 27, 2010 was $14.95 billion, up 35% from $11.07 billion last year. Revenue for the fourth quarter of fiscal 2010 was $4.08 billion, up 18% from $3.46 billion in the same quarter of last year and up 4% from $3.92 billion in the previous quarter. The revenue breakdown for the quarter was approximately 80% for devices, 16% for service, 2% for software and 2% for other revenue. Gross margin for the fourth quarter was 45.7% compared to 42.7% in the prior quarter. RIM shipped approximately 37 million devices during fiscal 2010 and approximately 10.5 million devices in the fourth quarter.
Approximately 4.9 million net new BlackBerry subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 41 million.
"RIM has completed another outstanding fiscal year with record revenue, earnings and subscriber results. Our company and partnerships continued to thrive within one of the most dynamic industries in the world. We managed to significantly expand our international market share while also maintaining our longstanding leadership in North America where BlackBerry continues to be the top selling smartphone brand," said Jim Balsillie, Co-CEO at Research In Motion. "We are off to a great start in fiscal 2011 and expect strong shipments, revenue, subscriber and earnings growth in Q1. We are also very excited about our portfolio of products and services for the coming year and we continue to see exceptional opportunity for sustained growth."
Net income for fiscal 2010 was $2.46 billion, or $4.31 per share diluted, up 29.8% over fiscal 2009. Net income for the quarter was $710.1 million, or $1.27 per share diluted, compared with net income of $628.4 million, or $1.10 per share diluted, in the prior quarter and net income of $518.3 million, or $0.90 per share diluted, in the same quarter last year.
Revenue for the first quarter of fiscal 2011 ending May 29, 2010 is expected to be in the range of $4.25-4.45 billion. Gross margin for Q1 is expected to be approximately 44.5%. Net subscriber account additions in the first quarter are expected to be between 4.9-5.2 million. Earnings per share for the first quarter are expected to be in the range of $1.31 - $1.38 per share diluted.
The total of cash, cash equivalents, short-term investments and long-term investments was $2.87 billion as at February 27, 2010, compared to $2.41 billion at the end of the previous quarter, an increase of $461 million over the prior quarter. Uses of cash in the quarter included capital expenditures of $258 million and the acquisition of intangible assets of $36 million.
A conference call and live webcast will be held beginning at 5 pm ET, March 31, 2010, which can be accessed by dialing 800-814-4859 (North America), 416-644-3414 (outside North America). The replay of the company's Q4 conference call can be accessed after 7 pm ET, March 31, 2010 until midnight ET, April 14, 2010. It can be accessed by dialing 416-640-1917 and entering passcode 4177292#. The conference call will also appear on the RIM website live at 5 pm ET and will be archived at http://www.rim.com/investors/events/index.shtml.
(1) IDC, "IDC announces the Top Ten Converged Mobile Devices in the United States for 4Q09", February 5, 2010
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 HandheldTM 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, including statements relating to RIM's revenue, gross margin, earnings expectation and net subscriber account additions for the first quarter of fiscal 2011, the anticipated growth of RIM's business globally in fiscal 2011, and anticipated product and service launches in the coming year. The terms "continue", "expected", "opportunity" 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 including but not limited to general economic conditions, product pricing levels and competitive intensity, supply constraints and new product introductions. 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: reduced spending by customers and other risks relating to the uncertainty of economic and geopolitical conditions; risks relating to RIM's intellectual property rights; RIM's ability to enhance current products and develop new products and services; RIM's reliance on carrier partners, third-party manufacturers, third-party network developers and suppliers; risks relating to the efficient and uninterrupted operation of RIM's network operations centre; risks related to RIM's international operations; 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 and RIM's MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov). 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, except as required by law.
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) (unaudited)
Consolidated Statements of Operations
Three months ended For the year ended
-------------------------------- ---------------------------
February November February February 27, February 28,
27, 2010 28, 2009 28, 2009 2010 2009
----------------------------------------------- ---------------------------
Revenue $4,079,712 $3,924,310 $3,463,193 $ 14,953,224 $ 11,065,186
Cost of sales 2,216,622 2,249,055 2,079,615 8,368,958 5,967,888
-------------------------------- ---------------------------
Gross margin 1,863,090 1,675,255 1,383,578 6,584,266 5,097,298
-------------------------------- ---------------------------
Gross margin
% 45.7% 42.7% 40.0% 44.0% 46.1%
Operating
expenses
Research and
development 267,164 242,329 182,535 964,841 684,702
Selling,
marketing and
administration 497,642 465,717 406,493 1,907,398 1,495,697
Amortization 86,540 83,129 61,595 310,357 194,803
Litigation - - - 163,800 -
-------------------------------- ---------------------------
851,346 791,175 650,623 3,346,396 2,375,202
-------------------------------- ---------------------------
Income from
operations 1,011,744 884,080 732,955 3,237,870 2,722,096
Investment
income 5,454 6,425 10,568 28,640 78,267
-------------------------------- ---------------------------
Income before
income taxes 1,017,198 890,505 743,523 3,266,510 2,800,363
-------------------------------- ---------------------------
Provision for
income taxes 307,076 262,134 225,264 809,366 907,747
-------------------------------- ---------------------------
Net income $ 710,122 $ 628,371 $ 518,259 $ 2,457,144 $ 1,892,616
-------------------------------- ---------------------------
-------------------------------- ---------------------------
Earnings per
share
Basic $ 1.27 $ 1.11 $ 0.92 $ 4.35 $ 3.35
-------------------------------- ---------------------------
-------------------------------- ---------------------------
Diluted $ 1.27 $ 1.10 $ 0.90 $ 4.31 $ 3.30
-------------------------------- ---------------------------
-------------------------------- ---------------------------
Weighted
average number
of common
shares
outstanding
(000's)
Basic 557,114 566,277 566,105 564,492 565,059
Diluted 561,130 570,929 572,753 569,759 574,156
Total common
shares
outstanding
(000's) 557,328 556,913 566,219 557,328 566,219
Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data) (unaudited)
Consolidated Balance Sheets
February 27, February 28,
As at 2010 2009
----------------------------------------------------------------------------
Assets
Current
Cash and cash equivalents $ 1,550,861 $ 835,546
Short-term investments 360,614 682,666
Accounts receivable, net 2,593,742 2,112,117
Other receivables 206,373 157,728
Inventories 621,611 682,400
Other current assets 285,539 187,257
Deferred income tax asset 193,916 183,872
---------------------------------
5,812,656 4,841,586
Long-term investments 958,248 720,635
Property, plant and equipment, net 1,956,581 1,334,648
Intangible assets, net 1,326,363 1,066,527
Goodwill 150,561 137,572
Deferred income tax asset - 404
---------------------------------
$ 10,204,409 $ 8,101,372
---------------------------------
---------------------------------
Liabilities
Current
Accounts payable $ 615,620 $ 448,339
Accrued liabilities 1,638,260 1,238,602
Income taxes payable 95,650 361,460
Deferred revenue 67,573 53,834
Deferred income tax liability 14,674 13,116
---------------------------------
2,431,777 2,115,351
Deferred income tax liability 141,382 87,917
Income taxes payable 28,587 23,976
---------------------------------
2,601,746 2,227,244
---------------------------------
Shareholders' Equity
Capital stock 2,207,609 2,208,235
Treasury stock (94,463) -
Retained earnings 5,274,365 3,545,710
Additional paid-in capital 164,060 119,726
Accumulated other comprehensive income 51,092 457
---------------------------------
7,602,663 5,874,128
---------------------------------
$ 10,204,409 $ 8,101,372
---------------------------------
---------------------------------
Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data) (unaudited)
Consolidated Statements of Cash Flows
For the year For the year
ended February ended February
27, 2010 28, 2009
----------------------------------------------------------------------------
Cash flows from operating activities
Net income $ 2,457,144 $ 1,892,616
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 615,621 327,896
Deferred income taxes 51,363 (36,623)
Income taxes payable 4,611 (6,897)
Stock-based compensation 58,038 38,100
Other 8,806 5,867
Net changes in working capital items (160,709) (769,114)
----------------------------------
Net cash provided by operating activities 3,034,874 1,451,845
----------------------------------
Cash flows from investing activities
Acquisition of long-term investments (862,977) (507,082)
Proceeds on sale or maturity of long-term
investments 473,476 431,713
Acquisition of property, plant and
equipment (1,009,416) (833,521)
Acquisition of intangible assets (421,400) (687,913)
Business acquisitions, net of cash
acquired (143,375) (48,425)
Acquisition of short-term investments (476,956) (917,316)
Proceeds on sale or maturity of short-term
investments 970,521 739,021
----------------------------------
Net cash used in investing activities (1,470,127) (1,823,523)
----------------------------------
Cash flows from financing activities
Issuance of common shares 30,246 27,024
Excess tax benefits from stock-based
compensation 1,943 12,648
Purchase of treasury stock (94,463) -
Common shares repurchased (775,008) -
Repayment of debt (6,099) (14,305)
----------------------------------
Net cash provided by (used in) financing
activities (843,381) 25,367
----------------------------------
Effect of foreign exchange loss on cash
and cash equivalents (6,051) (2,541)
----------------------------------
Net increase (decrease) in cash and cash
equivalents for the year 715,315 (348,852)
Cash and cash equivalents, beginning of
year 835,546 1,184,398
----------------------------------
Cash and cash equivalents, end of year $ 1,550,861 $ 835,546
----------------------------------
----------------------------------
February 27, November 28,
As at 2010 2009
----------------------------------------------------------------------------
Cash and cash equivalents $ 1,550,861 $ 1,286,309
Short-term investments 360,614 341,205
Long-term investments 958,248 781,206
----------------------------------
$ 2,869,723 $ 2,408,720
----------------------------------
----------------------------------
For more information, please contact
Media Contact:
Marisa Conway
Brodeur (PR Agency for RIM)
212-336-7509
mconway@brodeur.com
or
Investor Contact:
RIM Investor Relations
519-888-7465
investor_relations@rim.com
