Research In Motion
NASDAQ : RIMM
TSX : RIM

Research In Motion

April 11, 2007 16:10 ET

Research In Motion Reports Preliminary Fourth Quarter and Year-End Results for Fiscal 2007 and Provides Status Update

WATERLOO, ONTARIO--(CCNMatthews - April 11, 2007) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported preliminary results for the three months and fiscal year ended March 3, 2007 (all figures in U.S. dollars). This press release will also serve as the Company's regular, bi-weekly status update pursuant to the alternative information guidelines of the Ontario Securities Commission (the "OSC") that would have otherwise been issued on April 13, 2007. These guidelines contemplate that the Company will normally provide bi-weekly updates on its affairs until such time as the Company is current with its filing obligations under Canadian securities laws.

The results reported today are preliminary pending the U.S. GAAP restatement related to RIM's historical non-cash charges associated with past option grants. As previously disclosed, while the review of stock option granting practices by the Special Committee of RIM's Board of Directors is now complete, the Special Committee and its advisors, together with the Company and the Company's external auditors, continue to do the work necessary to complete the restatement of RIM's previously filed financial statements and to file its interim financial statements for the second and third quarters of fiscal 2007. As previously disclosed, the Company had originally anticipated updating its filings with the Canadian securities regulatory authorities and the United States Securities and Exchange commission (the "SEC") prior to its fiscal year end of March 3, 2007. Despite best efforts, the Company determined that additional time is required for the Company and its advisors to prepare the updated filings and for the Company's external auditors to complete their review of those filings. It is the Company's belief that the impact of any restatement on U.S. GAAP and adjusted operating results for fiscal 2007, including the fourth quarter, will be immaterial. RIM will file its restated financial statements as well as its financial statements for the second and third quarters of fiscal 2007, and the fiscal year ended March 3, 2007 as soon as possible. The Company has determined that the accounting impact on RIM's most recently filed Canadian GAAP statements do not result in a material adjustment and therefore the Company does not intend to restate the previously filed Canadian GAAP financial statements.

The Company has had communications with both staff of the OSC and the SEC about its internal review. As previously disclosed, the SEC has been conducting an informal inquiry in connection with the Company's stock option granting practices. The Company understands that the informal inquiry has been converted to a formal investigation. The Company believes that the focus of this investigation is substantially the same as the informal inquiry. The Company intends to continue to cooperate with the OSC and SEC.

Revenue for the fourth quarter of fiscal 2007 was $930.4 million, up 66% from $561.2 million in the same quarter of last year. The revenue breakdown for the quarter was approximately 73% for handhelds, 19% for service, 5% for software and 3% for other revenue. Revenue for the fiscal year ended March 3, 2007 was $3.0 billion, up 47% from $2.1 billion last year. RIM shipped approximately 6.4 million devices during fiscal 2007.

Approximately 1.02 million BlackBerry subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 8 million. Revenue and subscriber account additions will not be impacted by the restatement referenced above.

"We are extremely pleased to report record results with $3 billion of revenue generated in the fiscal year and over one million BlackBerry subscriber accounts added within the fourth quarter alone," said Jim Balsillie, Co-CEO at Research In Motion. "We are entering fiscal 2008 with very healthy subscriber growth momentum, a strong slate of products and services, exceptional partnerships and a growing market leadership position. We look forward to building on this momentum and further extending the market opportunity for RIM and its partners in the coming year."

Preliminary GAAP net income for the quarter was $187.9 million, or $0.99 per share diluted. Excluding regular stock option expense of $4.9 million, preliminary adjusted net income was $192.8 million, or $1.01 per share diluted. The preliminary adjusted net income and preliminary adjusted net income per share do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other issuers. The adjusted measures should be considered in the context of RIM's preliminary GAAP results.

Revenue for the first quarter of fiscal 2008 ending June 2, 2007 is expected to be in the range of $1.025 billion-$1.075 billion. Subscriber account additions in the first quarter are expected to be approximately in the range of 1.125-1.15 million. GAAP earnings per share for the first quarter are expected to be in the range of $0.99-$1.07 per share diluted. Adjusted earnings per share for the first quarter, which excludes regular stock option expense of approximately $5 million, are forecast to be in the range of $1.01-$1.09 per share diluted.

In RIM's fiscal 2007 fourth quarter, administration expense was higher than forecast as the Company incurred legal, accounting and other professional costs in connection with the voluntary internal review undertaken by the Company of its stock option granting practices and related accounting and in connection with the restatement of the Company's historical financial statements resulting from that review. A similar level of administration expense is also included in the forecast for the first quarter of fiscal 2008. As disclosed in the Company's March 5, 2007 press release, Jim Balsillie and Mike Lazaridis voluntarily offered to assist RIM in defraying costs incurred in connection with the review and the restatement by contributing up to CAD $10 million (up to CAD $5 million each) of those costs. RIM's preliminary fourth quarter and year-end accounting does not reflect the contributions to be made by Mr. Balsillie and Mr. Lazaridis, which are expected to be recorded in fiscal 2008.

The total of cash, cash equivalents, short-term and long-term investments was $1.4 billion as at March 3, 2007, compared to $1.3 billion at the end of the previous quarter, an increase of $93 million over the prior quarter.



Reconciliation of preliminary GAAP net income to preliminary adjusted
net income
(United States dollars, in thousands except per share data)

For the three
months ended
March 3, 2007
---------------------------------------------------------------------------

Preliminary GAAP net income, as reported $ 187,928

Adjustment:

Regular stock option expense, net of tax 4,900
--------------
Preliminary adjusted net income $ 192,828
--------------
--------------

Preliminary adjusted net income per share, diluted $ 1.01
--------------
--------------

Note: Preliminary adjusted net income and preliminary adjusted net income
per share do not have any standardized meaning prescribed by GAAP and
thus are not comparable to similar measures presented by other
issuers. Investors are encouraged to consider this adjusted measure
in the context of RIM's preliminary GAAP results.


Highlights of the fourth quarter:

- AT&T launched the BlackBerry 8800 in the U.S.

- T-Mobile launched the white BlackBerry Pearl in the U.S.

- Alltel Wireless launched the BlackBerry 8703e in the U.S.

- Cbeyond launched the BlackBerry 8703e in the U.S.

- Rogers Wireless launched the BlackBerry 8800 in Canada

- Telcel launched the BlackBerry Pearl in Mexico

- CLARO launched the BlackBerry Pearl in Brazil, Chile and Peru

- CTI launched the BlackBerry Pearl in Argentina

- Comcel launched the BlackBerry Pearl in Colombia

- TSTT launched the BlackBerry Pearl in Trinidad & Tobago

- Setar launched the BlackBerry Pearl in Aruba

- UTS launched the BlackBerry Pearl in the Dutch Antilles

- Telecom Personal launched the BlackBerry Pearl in Argentina

- Telefonica launched the BlackBerry Pearl in Ecuador and Uruguay

- Cable and Wireless launched the BlackBerry Pearl in Barbados, Cayman Islands, Jamaica and Panama

- Orange launched the BlackBerry 8800 in France, Spain and the UK

- T-Mobile launched the BlackBerry 8800 in Germany, Austria and the UK

- Vodafone launched the BlackBerry 8800 in the UK, Germany, France, Spain, Italy and the Netherlands

- O2 launched the BlackBerry 8800 in the UK and Ireland

- Movistar launched the BlackBerry 8800 in Spain

- Mobilkom launched the BlackBerry 8800 in Austria

- Swisscom launched the BlackBerry Pearl and the BlackBerry 8800 in Switzerland

- Proximus launched the BlackBerry 8800 in Belgium

- LUXGSM launched the BlackBerry 8800 in Luxembourg

- Tango launched the BlackBerry Pearl in Luxembourg

- Bouygues Telecom launched the BlackBerry Pearl in France

- KPN launched the BlackBerry Pearl in the Netherlands

- O2 launched the BlackBerry Pearl in Germany and the Czech Republic

- Orange launched the BlackBerry Pearl in France, Spain, Belgium and Switzerland

- Vodafone launched the BlackBerry Pearl in Croatia, Ireland, Sweden, Portugal, Luxemburg, Bulgaria and Switzerland

- Vipnet launched the BlackBerry Pearl in Croatia

- Wind launched the BlackBerry 8700g in Italy

- Fastlink and EMS launched BlackBerry in Jordan

- Turkcell launched the BlackBerry Pearl in Turkey

- Etisalat launched the BlackBerry Pearl in UAE

- Telstra launched the BlackBerry Pearl in Australia

- Vodafone launched the BlackBerry Pearl in New Zealand

- Hutch launched BlackBerry in India

- Peoples launched BlackBerry in Hong Kong

- XL launched BlackBerry in Indonesia

- Airtel launched the BlackBerry Pearl in India

- StarHub launched the BlackBerry Pearl in Singapore

- M1 launched the BlackBerry Pearl in Singapore

- Indosat launched the BlackBerry Pearl in Indonesia

- Maxis launched the BlackBerry Pearl in Malaysia

- AIS launched the BlackBerry Pearl in Thailand

- True Move launched the BlackBerry Pearl in Thailand

- Smart launched the BlackBerry Pearl in the Philippines

- Globe launched the BlackBerry Pearl in the Philippines

- RIM announced plans to offer BlackBerry Connect software on five new Microsoft Windows Mobile-based devices from HTC

- Dopod International launched BlackBerry Connect in Asia.

- Digicel launched BlackBerry Connect for the Sony Ericsson P990 in the Caribbean

- Fido launched BlackBerry Connect for the Nokia E62 in Canada

- BlackBerry ISV Alliance members continued to build upon the BlackBerry platform with a range of new products and services that help customers extend their wireless data strategies beyond wireless email.

Highlights Subsequent to Quarter End:

- RIM opened new BlackBerry APIs to support growth in mobile applications

- AT&T launched the red BlackBerry Pearl in the U.S.

- SunCom launched the BlackBerry Pearl in the U.S.

- Cincinnati Bell launched the BlackBerry Pearl in the U.S.

- TDC launched the BlackBerry Pearl in Denmark

- MTN Nigeria launched the BlackBerry Enterprise Solution

- MTC-Vodafone launched the BlackBerry Pearl and the BlackBerry 8707 in Bahrain

- CSL launched the white BlackBerry Pearl and the BlackBerry 8800 in Hong Kong

- Three launched the white BlackBerry Pearl and the BlackBerry 8800 in Hong Kong

- SmarTone-Vodafone launched the white BlackBerry Pearl and the BlackBerry 8800 in Hong Kong

- Nextel launched BlackBerry in Argentina and Brazil

- TIM launched the BlackBerry Pearl in Brazil

- Telefonica launched the BlackBerry Pearl in Argentina and Colombia

There is no other material information concerning the affairs of the Company at this time that has not been generally disclosed.

The replay of the company's Q4 conference call can be accessed after 7 p.m. (eastern), April 11, 2007 until midnight (eastern), April 25, 2007. It can be accessed by dialing 416-640-1917 and entering passcode 21221682#. The conference will also appear on the RIM web site, live at 5:00 pm (eastern) and archived at http://www.rim.com/investors/events/index.shtml until midnight April 25, 2007

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 and earnings expectations for the first quarter of fiscal 2008, RIM's views regarding anticipated growth in subscribers, plans relating to RIM, including plans for new product launches and its expectations regarding its carrier partners, and statements relating to RIM's management-initiated, voluntary internal review of its stock option granting practices, including statements regarding the anticipated timing of filing financial statements and the additional work required to complete such filings, and the anticipated financial impact of the restatement on GAAP and adjusted operating results for fiscal 2007, including the fourth quarter, and statements regarding RIM's intention to provide regular updates to its shareholders. The terms and phrases, "it is the Company's belief", "will", "healthy subscriber growth momentum", "growing market leadership position", "building on this momentum", "further extending the market opportunity", "expected", "forecast" 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. 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: risks and uncertainties relating to RIM's internal review of stock option granting practices including, further determinations made by the Special Committee, outside advisors, auditors and others, unanticipated developments and delays encountered in connection with RIM's efforts to complete the restatement of its financial statements and its securities filings, developments relating to the SEC, the OSC or other regulators relating to RIM's stock option granting practices, additional corrections that may be required based on factual findings and analysis following the date of this news release, risks associated with litigation relating to RIM's stock option grants, and legal and accounting developments and guidance regarding stock option grants and the interpretation of such guidance; risks relating to RIM's intellectual property rights; RIM's ability to enhance current products and develop and introduce new products; RIM's reliance on carrier partners, third-party network developers and suppliers; and intense competition.
In particular, as noted in this news release, the Special Committee and its advisors, together with the Company and its external auditors, continue to do the work necessary to complete the restatement of RIM's previously filed financial statements and to file its interim financial statements for the second and third quarters of fiscal 2007, and statements in this news release regarding the anticipated financial impact of the restatement on GAAP and adjusted operating results for fiscal 2007, including the fourth quarter, could be subject to change as such work continues. Certain of 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 (copies of which filings may be obtained at www.sedar.com or www.sec.gov) and RIM's other public filings with the Securities and Exchange Commission and Canadian securities regulators. 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.

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)

Preliminary Consolidated Statements of Operations

For the three months ended For the year ended
-------------------------------- -------------------------
March 3, December 2, March 4, March 3, March 4,
2007 2006 2006 2007 2006
------------------------------------------------- -------------------------

Revenue $ 930,393 $ 835,053 $ 561,219 $ 3,037,103 $ 2,065,845
Cost of sales 432,984 382,295 252,566 1,378,917 925,215
-------------------------------- -------------------------
Gross margin 497,409 452,758 308,653 1,658,186 1,140,630
-------------------------------- -------------------------
Gross margin % 53.5% 54.2% 55.0% 54.6% 55.2%

Expenses
Research and
development 66,994 60,833 43,851 234,967 157,629
Selling,
marketing
and
administration 166,769 145,903 92,321 535,787 311,420
Amortization 22,021 20,334 15,322 76,879 49,951
NTP Litigation - - 162,500 - 201,791
-------------------------------- -------------------------
255,784 227,070 313,994 847,633 720,791
-------------------------------- -------------------------

Income (loss)
from
operations 241,625 225,688 (5,341) 810,553 419,839

Investment
income 14,794 12,666 19,219 52,117 66,218
-------------------------------- -------------------------

Income before
income taxes 256,419 238,354 13,878 862,670 486,057
-------------------------------- -------------------------

Provision for
(recovery of)
income taxes
Current 33,409 50,775 (70,725) 126,179 14,515
Deferred 35,082 11,562 66,249 101,996 89,464
-------------------------------- -------------------------
68,491 62,337 (4,476) 228,175 103,979

-------------------------------- -------------------------
Net income $ 187,928 $ 176,017 $ 18,354 $ 634,495 $ 382,078
-------------------------------- -------------------------
-------------------------------- -------------------------

Earnings per
share
Basic $ 1.01 $ 0.95 $ 0.10 $ 3.42 $ 2.02
-------------------------------- -------------------------
-------------------------------- -------------------------
Diluted $ 0.99 $ 0.93 $ 0.10 $ 3.33 $ 1.96
-------------------------------- -------------------------
-------------------------------- -------------------------

Weighted average
number of common
shares
outstanding
(000's)
Basic 185,741 184,321 185,558 185,353 188,914
Diluted 190,253 189,821 191,509 190,603 194,942

Total common
shares
outstanding
(000's) 185,871 185,601 186,002 185,871 186,002



Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands)

Preliminary Consolidated Balance Sheets


As at March 3, 2007 March 4, 2006
---------------------------------------------------------------------------

Assets
Current
Cash and cash equivalents $ 677,144 $ 459,540
Short-term investments 310,082 175,553
Trade receivables 572,637 315,278
Other receivables 40,174 31,861
Inventory 255,907 134,523
Other current assets 41,697 45,453
Deferred income tax asset 21,624 94,789
--------------------------------
1,919,265 1,256,997

Investments 425,652 614,309
Capital assets 487,579 326,313
Intangible assets 138,182 85,929
Goodwill 109,932 29,026
Deferred income tax asset 8,339 -
--------------------------------
$ 3,088,949 $ 2,312,574
--------------------------------
--------------------------------

Liabilities
Current
Accounts payable $ 130,270 $ 94,954
Accrued liabilities 280,438 145,330
Income taxes payable 102,446 17,584
Deferred revenue 28,447 20,968
Current portion of long-term debt 271 262
--------------------------------
541,872 279,098

Long-term debt 6,342 6,851
Deferred income tax liability 52,532 27,858
--------------------------------
600,746 313,807

Shareholders' equity 2,488,203 1,998,767
--------------------------------
$ 3,088,949 $ 2,312,574
--------------------------------
--------------------------------



Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands)

Preliminary Consolidated Statements of Cash Flows

For the three For the
months ended year ended
March 3, 2007 March 3, 2007
---------------------------------------------------------------------------

Cash flows from operating activities
Net income $ 187,928 $ 634,495

Items not requiring an outlay of cash:
Amortization 34,314 126,355
Deferred income taxes 36,276 105,801
Share-based payment 4,900 17,491
Other (343) (315)
Net changes in working capital items (88,706) (142,158)
--------------------------------
Net cash provided by operating activities 174,369 741,669
--------------------------------

Cash flows from financing activities
Issuance of share capital 5,113 44,534
Common shares repurchased pursuant to
Common Share Repurchase Program - (203,933)
Repayment of long-term debt (66) (262)
--------------------------------
Net cash provided by (used in) financing
activities 5,047 (159,661)
--------------------------------

Cash flows from investing activities
Acquisition of investments (55,513) (100,080)
Proceeds on sale or maturity of
investments 20,418 86,583
Acquisition of capital assets (77,198) (254,041)
Acquisition of intangible assets (10,891) (60,303)
Business acquisition (160) (116,190)
Acquisition of short-term investments (99,641) (163,147)
Proceeds on sale or maturity of
short-term investments 107,723 242,601
--------------------------------
Net cash used in investing activities (115,262) (364,577)
--------------------------------
Effect of foreign exchange gain on
cash and cash equivalents 173 173
--------------------------------
Net increase in cash and cash equivalents
for the period 64,327 217,604

Cash and cash equivalents, beginning
of period 612,817 459,540
--------------------------------
Cash and cash equivalents, end of period $ 677,144 $ 677,144
--------------------------------
--------------------------------



As at March 3, 2007 December 2, 2006
---------------------------------------------------------------------------

Cash and cash equivalents $ 677,144 $ 612,817
Short-term investments 310,082 280,635
Investments 425,652 426,595
--------------------------------
$ 1,412,878 $ 1,320,047
--------------------------------
--------------------------------


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