Research In Motion
NASDAQ : RIMM
TSX : RIM

Research In Motion

December 17, 2009 16:05 ET

Research In Motion Reports Third Quarter Results

WATERLOO, ONTARIO--(Marketwire - Dec. 17, 2009) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported third quarter results for the three months ended November 28, 2009 (all figures in U.S. dollars and U.S. GAAP, except where indicated).

Revenue for the third quarter of fiscal 2010 was $3.92 billion, up 11% from $3.53 billion in the previous quarter and up 41% from $2.78 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 82% for devices, 14% for service, 2% for software and 2% for other revenue. During the quarter, RIM shipped approximately 10.1 million devices, including its 75 millionth BlackBerry smartphone.

Approximately 4.4 million net new BlackBerry® subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 36 million.

"We are pleased to report record shipments of more than 10 million BlackBerry smartphones during the third quarter with higher than expected revenue, earnings and subscriber growth," said Jim Balsillie, Co- CEO at Research In Motion. "RIM is experiencing a great start to the holiday buying season and the strong Q3 results and Q4 outlook clearly reflect the strength of our diversified product portfolio as well as the success of our efforts to expand into broader customer segments and new geographies while maintaining our strong position in North America."

Net income for the quarter was $628.4 million, or $1.10 per share diluted, compared with net income of $475.6 million, or $0.83 per share diluted, in the prior quarter and net income of $396.3 million, or $0.69 per share diluted, in the same quarter last year. The earnings per share in the quarter was not impacted by repurchases under RIM's Common Share Repurchase program.

Revenue for the fourth quarter of fiscal 2010 ending February 27, 2010 is expected to be in the range of $4.2-$4.4 billion. Gross margin for Q4 is expected to be approximately 43.5%. Net subscriber account additions in the fourth quarter are expected to be in the range of 4.4-4.7 million. Earnings per share for the fourth quarter are expected to be in the range of $1.23- $1.31 per share diluted. This reflects a positive impact of approximately $0.03 per share related to the cancellation of 12.3 million shares repurchased under RIM's share repurchase program during the third quarter.

The total of cash, cash equivalents, short-term and long-term investments was $2.41 billion as at November 28, 2009, compared to $2.50 billion at the end of the previous quarter, a decrease of $90 million over the prior quarter. Cash flow from operations in Q3 was approximately $1.07 billion. Uses of cash in the quarter included capital expenditures of approximately $196 million, intangible asset purchases of approximately $143 million and a common share repurchase pursuant to the share repurchase program of $775 million.

A conference call and live webcast will be held beginning at 5 pm ET, December 17, 2009, which can be accessed by dialing 800-733-7571 (North America), 416-915-5761 (outside North America). The replay of the company's Q3 conference call can be accessed after 7 pm ET, December 17, 2009 until midnight ET, December 31, 2009. It can be accessed by dialing 416-640-1917 and entering passcode 4189541#.

The conference call will also be available on the RIM website live at 5 pm ET and will be archived at http://www.rim.com/investors/events/index.shtml.

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 Handheld™ 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 and net subscriber account additions for the fourth quarter of fiscal 2010, RIM's expectations for the holiday buying season and its plans to expand into broader market segments and new geographies . The terms and phrases "expected", "experiencing a great start", "outlook", "efforts to expand", 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     Nine months ended
 
  November 28,   August 29,   November 29,     November 28,     November 29,
    2009     2009     2008       2009     2008
Revenue $ 3,924,310   $ 3,525,692   $ 2,782,098     $ 10,873,512   $ 7,601,993
Cost of sales   2,249,055     1,971,296     1,512,592       6,152,336     3,888,273
Gross margin   1,675,255     1,554,396     1,269,506       4,721,176     3,713,720
      Gross margin %   42.7%     44.1%     45.6%       43.4%     48.9%
 
Operating expenses                              
  Research and development   242,329     235,571     193,044       697,677     502,167
  Selling, marketing and                              
    administration   465,717     429,748     382,968       1,409,756     1,089,204
  Amortization   83,129     73,292     53,023       223,817     133,208
  Litigation   -     163,800     -       163,800     -
    791,175     902,411     629,035       2,495,050     1,724,579
 
Income from operations   884,080     651,985     640,471       2,226,126     1,989,141
 
    Investment income   6,425     7,625     31,554       23,186     67,699
 
Income before income taxes   890,505     659,610     672,025       2,249,312     2,056,840
Provision for income taxes   262,134     183,989     275,729       502,290     682,483
 
Net income $ 628,371   $ 475,621   $ 396,296     $ 1,747,022   $ 1,374,357
 
Earnings per share                              
      Basic $ 1.11   $ 0.84   $ 0.70     $ 3.08   $ 2.43
      Diluted $ 1.10   $ 0.83   $ 0.69     $ 3.05   $ 2.39
 
Weighted average number of common shares outstanding (000's)                              
      Basic   566,277     567,789     565,687       566,951     564,710
      Diluted   570,929     573,565     573,514       572,608     574,469
 
Total common shares outstanding (000's)   556,913     568,219     565,998       556,913     565,998
 
 
 
Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data)(unaudited)
 
Consolidated Balance Sheets
 
     November 28,   February 28,
As at   2009     2009
 
Assets          
 Current          
   Cash and cash equivalents  $ 1,286,309   $ 835,546
   Short-term investments   341,205     682,666
   Trade receivables   2,712,414     2,112,117
   Other receivables   210,028     157,728
   Inventories   612,787     682,400
   Other current assets   198,696     187,257
   Deferred income tax asset   212,461     183,872
      5,573,900     4,841,586
 
 
Long-term investments   781,206     720,635
Capital assets   1,843,760     1,334,648
Intangible assets   1,359,060     1,066,527
Goodwill   146,557     137,572
Deferred income tax asset     -     404
     $ 9,704,483   $ 8,101,372
 
Liabilities          
 Current          
   Accounts payable  $ 815,415   $ 448,339
   Accrued liabilities   1,726,498     1,238,602
   Income taxes payable   140,294     361,460
   Deferred revenue   70,169     53,834
   Deferred income tax liability     -     13,116
      2,752,376     2,115,351
 
Deferred income tax liability   103,261     87,917
Income taxes payable     28,355     23,976
      2,883,992     2,227,244
 
Shareholders' Equity          
Capital stock   2,199,806     2,208,235
Treasury shares   (88,813 )    -
Retained earnings   4,564,243     3,545,710
Additional paid-in capital   150,095     119,726
Accumulated other comprehensive income (loss)     (4,840 )    457
      6,820,491     5,874,128
     $ 9,704,483   $ 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
 
    Nine months ended       Nine  months ended  
     November 28, 2009     November 29, 2008  
 
 
Cash flows from operating activities                
                 
Net income $ 1,747,022     $ 1,374,357  
 
Items not requiring an outlay of cash:                
 Amortization     434,766       211,771  
 Deferred income taxes     2,282       (39,914
 Income taxes payable     4,379       (6,441
 Stock-based compensation     41,691       29,200  
 Other     (2,958 )      (7,739
Net changes in working capital items     36,341       (408,139
Net cash provided by operating activities     2,263,523       1,153,095  
 
Cash flows from investing activities                
Acquisition of long-term investments     (605,429 )      (439,756
Proceeds on sale or maturity of long-term investments     430,380       304,665  
Acquisition of capital assets     (750,954 )      (581,589
Acquisition of intangible assets     (385,548 )      (465,949
Business Acquisitions     (131,541 )      -  
Acquisition of short-term investments     (390,389 )      (667,298
Proceeds on sale or maturity of short-term investments     868,066       568,843  
Net cash used in investing activities     (965,415 )        (1,281,084
 
Cash flows from financing activities                
Issuance of common shares     24,722       24,841  
Excess tax benefits from stock-based compensation     2,046       12,700  
Purchase of treasury shares     (88,813 )      -  
Common shares repurchased pursuant to Common Share Repurchase Program     (775,008 )      -  
Repayment of debt     (6,099 )      (244
Net cash (used in) provided by financing activities     (843,152 )      37,297  
Effect of foreign exchange (loss) gain on cash and cash equivalents     (4,193 )      8,008  
 
Net increase (decrease) in cash and cash equivalents for the period       450,763         (82,684
 
Cash and cash equivalents, beginning of period     835,546       1,184,398  
Cash and cash equivalents, end of period   $ 1,286,309     $ 1,101,714  
 
 
 
 
As at     November 28, 2009       August 29, 2009  
 
Cash and cash equivalents $ 1,286,309     $ 1,083,251  
Short-term investments     341,205       580,921  
Long-term investments     781,206       833,575  
    $ 2,408,720     $ 2,497,747  

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