Research In Motion Reports Second Quarter Results
WATERLOO, ONTARIO--(Marketwire - Sept. 25, 2008) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported second quarter results for the three months ended August 30, 2008 (all figures in U.S. dollars and U.S. GAAP).
Revenue for the second quarter of fiscal 2009 was $2.58 billion, up 15% from $2.24 billion in the previous quarter and up 88% from $1.37 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 82% for devices, 13% for service, 3% for software and 2% for other revenue. During the quarter, RIM shipped approximately 6.1 million devices.
Approximately 2.6 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 19 million.
"Fiscal 2009 is proving to be an extraordinary year for RIM and its partners," said Jim Balsillie, Co-CEO at Research In Motion. "We shipped over 11 million BlackBerry smartphones in the first half and we're gearing up for an even stronger second half. Our enterprise business remains strong and our momentum in the consumer marketplace continues as we head into the holiday buying season with an amazing product portfolio and solid marketing support from partners."
Net income for the quarter was $495.5 million, or $0.86 per share diluted, compared with net income of $482.5 million, or $0.84 per share diluted, in the prior quarter and net income of $287.7 million, or $0.50 per share diluted, in the same quarter last year.
Revenue for the third quarter of fiscal 2009 ending November 29, 2008 is expected to be in the range of $2.95-$3.10 billion. Net subscriber account additions in the third quarter are expected to be approximately 2.9 million. Earnings per share for the third quarter are expected to be in the range of $0.89-$0.97 per share diluted based on a gross margin of approximately 47% and operating expenses that are 1-2% lower as a percentage of revenue than in the second quarter.
The total of cash, cash equivalents, short-term and long-term investments was $2.24 billion as at August 30, 2008, compared to $2.08 billion at the end of the previous quarter, an increase of $163 million over the prior quarter. Uses of cash in the quarter included capital expenditures of approximately $190 million and intangible asset purchases of approximately $234 million.
The replay of the company's Q2 conference call can be accessed after 7:00 pm (eastern), September 25, 2008 until midnight (eastern), October 9, 2008. It can be accessed by dialing 416-640-1917 and entering passcode 21252985#. 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.
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 and earnings expectations for the third quarter of fiscal 2009, anticipated growth in subscribers, product shipments, expectations relating to RIM's margin and operating expenses in the third quarter of fiscal 2009, and other plans relating to RIM. The terms and phrases "momentum", "gearing up", "continues", "expected", 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: risks relating to the restatement of RIM's previously-filed financial statements as a result of the internal review of RIM's historical option granting practices, and regulatory investigations and litigation relating to those matters, including possible sanctions or penalties against the Company or its directors or officers; risks relating to RIM's intellectual property rights; RIM's ability to enhance current products and develop new products; RIM's reliance on carrier partners, third-party network developers and suppliers; risks relating to the efficient and uninterrupted operation of RIM's network operations center; 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), 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, 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
For the three months ended For the six months ended
------------------------------------ ---------------------------
August 30, May 31, September 1, August 30, September 1,
2008 2008 2007 2008 2007
----------------------------------------------------------------------------
Revenue $ 2,577,330 $ 2,242,565 $ 1,372,250 $ 4,819,895 $ 2,454,161
Cost of
sales 1,270,473 1,105,208 667,833 2,375,681 1,189,674
------------------------------------- ---------------------------
Gross
margin 1,306,857 1,137,357 704,417 2,444,214 1,264,487
------------------------------------- ---------------------------
Gross
margin % 50.7% 50.7% 51.3% 50.7% 51.5%
Expenses
Research
and
development 181,347 127,776 88,171 309,123 163,105
Selling,
marketing
and
adminis-
tration 379,644 326,592 197,943 706,236 375,426
Amortiz-
ation 43,633 36,552 25,350 80,185 49,145
------------------------------------- ---------------------------
604,624 490,920 311,464 1,095,544 587,676
------------------------------------- ---------------------------
Income from
operations 702,233 646,437 392,953 1,348,670 676,811
Investment
income 17,168 18,977 18,984 36,145 35,431
------------------------------------- ---------------------------
Income
before
income
taxes 719,401 665,414 411,937 1,384,815 712,242
------------------------------------- ---------------------------
Provision
for
income
taxes
Current 200,918 225,658 137,643 426,576 267,809
Deferred 22,937 (42,759) (13,391) (19,822) (66,472)
------------------------------------- ---------------------------
223,855 182,899 124,252 406,754 201,337
------------------------------------- ---------------------------
Net income $ 495,546 $ 482,515 $ 287,685 $ 978,061 $ 510,905
------------------------------------- ---------------------------
------------------------------------- ---------------------------
Earnings
per share
Basic $ 0.88 $ 0.86 $ 0.51 $ 1.73 $ 0.91
------------------------------------- ---------------------------
------------------------------------- ---------------------------
Diluted $ 0.86 $ 0.84 $ 0.50 $ 1.70 $ 0.89
------------------------------------- ---------------------------
------------------------------------- ---------------------------
Weighted
average
number of
common
shares
outstand-
ing (000's)
Basic 564,899 563,564 558,991 564,222 558,422
Diluted 574,831 574,650 572,165 574,738 571,379
Total
common
shares
outstand-
ing (000's) 565,370 564,418 559,820 565,370 559,820
Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data)(unaudited)
Consolidated Balance Sheets
August 30, March 1,
As at 2008 2008
----------------------------------------------------------------------------
Assets
Current
Cash and cash equivalents $ 1,131,074 $ 1,184,398
Short-term investments 422,121 420,709
Trade receivables 1,766,774 1,174,692
Other receivables 118,537 74,689
Inventory 512,904 396,267
Other current assets 136,628 135,849
Deferred income tax asset 126,223 90,750
----------------------------
4,214,261 3,477,354
Long-term investments 686,457 738,889
Capital assets 1,005,658 705,955
Intangible assets 869,773 469,988
Goodwill 114,455 114,455
Deferred income tax asset 2,642 4,546
----------------------------
$ 6,893,246 $ 5,511,187
----------------------------
----------------------------
Liabilities
Current
Accounts payable $ 640,154 $ 271,076
Accrued liabilities 977,827 690,442
Income taxes payable 156,757 475,328
Deferred revenue 60,186 37,236
Current portion of long-term debt 6,906 349
Deferred income tax liability 7,196 -
----------------------------
1,849,026 1,474,431
Long-term debt - 7,259
Deferred income tax liability 66,995 65,058
Income taxes payable 28,669 30,873
----------------------------
1,944,690 1,577,621
----------------------------
Shareholders' Equity
Capital stock 2,199,813 2,169,856
Retained earnings 2,631,155 1,653,094
Paid-in capital 104,049 80,333
Accumulated other comprehensive income 13,539 30,283
----------------------------
4,948,556 3,933,566
----------------------------
$ 6,893,246 $ 5,511,187
----------------------------
----------------------------
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 three For the six
months ended months ended
August 30, 2008 August 30, 2008
----------------------------------------------------------------------------
Cash flows from operating activities
Net income $ 495,546 $ 978,061
Items not requiring an outlay of cash:
Amortization 69,316 125,995
Deferred income taxes 24,073 (18,678)
Income taxes payable (1,779) (2,204)
Stock-based compensation 9,700 19,600
Other 12,089 12,080
Net changes in working capital items (17,242) (515,775)
-----------------------------------
Net cash provided by operating activities 591,703 599,079
-----------------------------------
Cash flows from financing activities
Issuance of common shares 6,883 21,927
Excess tax benefits from stock-based
compensation 1,453 12,146
Repayment of long-term debt (83) (166)
-----------------------------------
Net cash provided by financing activities 8,253 33,907
-----------------------------------
Cash flows from investing activities
Acquisition of long-term investments (59,946) (173,642)
Proceeds on sale or maturity of long-term
investments 48,591 143,674
Acquisition of capital assets (190,389) (386,039)
Acquisition of intangible assets (234,135) (331,027)
Acquisition of short-term investments (161,863) (335,768)
Proceeds on sale or maturity of
short-term investments 156,322 408,171
-----------------------------------
Net cash used in investing activities (441,420) (674,631)
-----------------------------------
Effect of foreign exchange loss on cash
and cash equivalents (11,679) (11,679)
-----------------------------------
Net increase (decrease) in cash and cash
equivalents for the period 146,857 (53,324)
Cash and cash equivalents, beginning of
period 984,217 1,184,398
-----------------------------------
Cash and cash equivalents, end of period $ 1,131,074 $ 1,131,074
-----------------------------------
-----------------------------------
As at August 30, 2008 May 31, 2008
----------------------------------------------------------------------------
Cash and cash equivalents $ 1,131,074 $ 984,217
Short-term investments 422,121 391,939
Long-term investments 686,457 700,400
-----------------------------------
$ 2,239,652 $ 2,076,556
-----------------------------------
-----------------------------------
For more information, please contact
Media Contact:Brodeur Partners (PR Agency for RIM)
Marisa Conway
(212) 515-1924
Email: mconway@brodeur.com
or
Investor Contact:
RIM Investor Relations
(519) 888-7465
Email: investor_relations@rim.com