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News
Issue #2003 - 12 (April 2003)
(Updated Apr. 9, 2003)

APPLICATION SOLUTIONS & APPLICATION DEVELOPMENT

RIM Reports Higher Revenue & Lower Loss

Waterloo, Ontario - Research In Motion Limited ("RIM"), a world leader in the mobile communications device and always-on e-mail sector, reported fourth quarter and fiscal year end results for the period ended March 1, 2003 (all figures in U.S. dollars and Canadian GAAP).

Revenue for the fourth quarter of fiscal 2003 was $87.5 million, an increase of 18% from $74.2 million in the previous quarter. The revenue breakdown for the quarter was approximately 46% for handhelds, 41% for service, 6% for software licences, and 7% for OEM radios and other revenue. Revenue for the fiscal year 2003 was $306.7 million versus $294.1 million in the prior year.

The total number of BlackBerry® subscribers increased by approximately 71,000 during the quarter to 534,000 subscribers and the total number of organizations with BlackBerry Enterprise Server installed increased to approximately 10,000 from approximately 8,500 in the prior quarter.

Jim Balsillie, Chairman and Co-CEO, commented on the results:
"We stayed focused on executing our business plan this year and succeeded in strengthening our position as well as setting the stage for future growth. Despite a conservative enterprise spending environment, our momentum continues in both financial and strategic terms. We achieved record net subscriber growth in the fourth quarter while continuing to control expenses and while maintaining a flat cash position with healthy reserves. Our market leadership also gained on multiple fronts. The BlackBerry customer base now includes approximately 10,000 discrete corporate and government organizations running our server software behind their firewall. We continue to lead with a range of wireless handhelds and software enhancements for both users and IT departments. New and existing partnerships are extremely strong and synergetic. Our international expansion continues and our licensing program has opened significant new opportunities. This year we have further entrenched our leadership position in the enterprise sector and we are well poised for continuing growth in broader market segments."

As announced on March 6, 2003, RIM recorded a pre-tax charge during the quarter related to the previously disclosed patent litigation with NTP Inc. The provision of $6.9 million includes compensatory damages for the period November 1, 2002 to March 1, 2003, which are incremental to the previously announced $23.1 million jury verdict in November 2002, and prejudgment interest up to March 1, 2003. Additionally RIM has increased its estimate for current and estimated future legal fees, bringing the fiscal 2003 NTP patent litigation provision to $39.5 million. The litigation and this provision remain subject to the outcome of mediation, final rulings and potential appeals.

To account for any potential future compensatory damages subsequent to March 1, 2003, RIM will deposit in escrow an amount equal to 5.7% of the quarterly infringing revenues, and shall continue to do so on a quarterly basis until such time as the judgment is affirmed, reversed or remanded. All funds placed in escrow will be retained by RIM if any appeal is successful. Commencing in the first quarter of fiscal 2004, RIM will record an incremental provision for compensatory damages with respect to the NTP patent litigation at a rate equal to 5.7% of relevant quarterly sales, plus an estimate for post judgment interest, which is expected to total $3 to $4 million per quarter. RIM will provide updates with respect to the ongoing NTP provision on a quarterly basis.

The United States District Court for the Eastern District of Virginia is scheduled to rule in this case on April 15, 2003, which is anticipated to be before the filing of the Company's annual financial statements and annual report with regulators and shareholders. At that time, assuming the final rulings by the District Court are made, RIM will finalize its provision and determine whether any adjustments are required to the reported $39.5 million figure for the year ended March 1, 2003. The Company will then revise fourth quarter and fiscal 2003 results if an adjustment is required.

The GAAP net loss for the quarter was $12.6 million, or $0.16 per share. Excluding the non-cash NTP patent litigation provision of $6.9 million above, the adjusted non-GAAP net loss for the quarter was $5.7 million, or $0.07 per share. The adjusted net loss and adjusted net loss per share do not have any standardized meaning prescribed by GAAP and are not comparable to similar measures presented by other issuers.

The total of the Company's cash, cash equivalents, marketable securities and long-term portfolio investments remained steady at $530.7 million as at March 1, 2003, compared to $531.1 million at the end of the previous quarter. Cash in-flow from operating and financing activities was $9.5 million for the quarter, offset by cash used for acquisitions of capital and other intangible assets of $9.9 million.

Highlights of the fourth quarter: 

RIM introduced the data and voice-enabled BlackBerry 6750™ handheld for CDMA2000 1X wireless networks. The new Java-based BlackBerry 6750 features wireless email, dual band phone, SMS, browser and organizer applications in a single handheld. 

The BlackBerry 6750 became commercially available to mobile professionals in Canada through Bell Mobility. 
Verizon Wireless and RIM announced plans to offer the new BlackBerry 6750™ operating on Verizon Wireless' Express Network. The companies demonstrated the BlackBerry 6750 at CTIA Wireless 2003 and announced that availability from Verizon Wireless is expected during the second calendar quarter of this year. 

TELUS Mobility and RIM announced plans to offer BlackBerry to enterprise clients using TELUS Mobility's 1X network across Canada. 

Cingular Wireless and RIM announced plans to support BlackBerry on Cingular's GSM/GPRS network. Subsequent to the quarter, Cingular also renewed its supply agreement with RIM for Mobitex products. 

RIM introduced the BlackBerry 6510™ with commercial availability from Nextel and announced plans with Nextel Partners, Inc. to expand distribution of the BlackBerry 6510™ to mid-sized markets. 

RIM announced availability of the BlackBerry 6720 Wireless Handheld™ in the United Kingdom through T-Mobile UK. 
Telefónica Móviles España and RIM announced an agreement to sell BlackBerry to enterprise customers in Spain. 
Swisscom Mobile and RIM announced plans to bring the BlackBerry wireless platform to enterprise customers in Switzerland using Swisscom Mobile's GSM/GPRS network. 

StarHub and RIM signed an agreement to provide the BlackBerry wireless platform to corporate customers in Singapore. 

America Movil and RIM announced plans to bring the BlackBerry wireless platform to Latin America for the first time. BlackBerry will be initially available through America Movil's wholly-owned subsidiary, Telcel, in Mexico. 

Alpha Micro Components and RIM announced a new supply agreement that enables Alpha Micro to distribute RIM's OEM radio modems for GSM/GPRS wireless networks to device manufacturers in the UK and Ireland. RIM also announced that its radio modems for GSM/GPRS networks received regulatory certifications in North America, Europe and Asia Pacific. 

Highlights subsequent to quarter end: 

RIM formally unveiled its BlackBerry Connect™ licensing program for mobile device manufacturers such as Nokia that wish to equip their handsets with the integrated ability to connect to BlackBerry Enterprise Server™ using RIM's secure, push-based wireless architecture and infrastructure. 

RIM plans to provide a BlackBerry connectivity solution to Symbian OS licensees and carriers to enable wireless email and corporate data services on Symbian OS phones. 

RIM plans to enable BlackBerry connectivity for mobile devices based on the Microsoft Windows Powered Pocket PC and Smartphone platforms.

RIM and High Tech Computer Corp. (HTC) plan to enable the Pocket PC and Smartphone devices from HTC to connect to BlackBerry Enterprise Server. 

RIM unveiled the Java-based BlackBerry 6210™ (world band) and BlackBerry 6220™ (dual band) data and voice-enabled handhelds for global GSM/GPRS networks. New handheld features include a smaller design with a light and comfortable feel, increased memory for greater application and data storage, as well as new support for wireless email synchronization and integrated attachment viewing. During the CTIA Wireless show, AT&T Wireless announced its plans to offer the BlackBerry 6210 in the second quarter of calendar 2003.

T-Mobile International and RIM announced that they are working together to introduce a BlackBerry offering for professional consumers and smaller firms in Germany, the UK and Austria, with other T-Mobile markets to follow. Vodafone D2 and RIM announced that they are working together to bring BlackBerry to Vodafone's corporate customers in Germany. 

RIM signed an agreement with Motorola that provides a reciprocal license for certain patents under RIM's wireless patent portfolio and Motorola's leading patent portfolio for the GSM and CDMA mobile telephony standards. 

Source: RIM Press Release

MobileInfo Comments and Advisory: RIM has taken prudent steps in setting aside enough financial resources to pay for any potential damages from its litigation with NTP. As the economy turns around, RIM will regain its leadership position.

 Note: This news release may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of Securities Exchange act of 1934 in USA. Similar provisions exist in other countries. There is no assurance that the stipulated plans of vendors will be implemented. MobileInfo does not warrant the authenticity of the information. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.


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