Research In Motion Reports Year-End and Fourth Quarter Results for Fiscal 2011

Marketwired

WATERLOO, ONTARIO--(Marketwire - 03/24/11) - Research In Motion Limited (RIM) (NASDAQ:RIMM - News)(TSX:RIM - News), a world leader in the mobile communications market, today reported fourth quarter results for the three months and fiscal year ended February 26, 2011 (all figures in U.S. dollars and U.S. GAAP).Highlights:

 

-- Record BlackBerry® smartphone shipments of 52.3 million grew 43% over
fiscal 2010
-- Fiscal 2011 revenue grew 33% over fiscal 2010 to $19.9 billion and
earnings per share grew 47% over the prior fiscal year to $6.34 per
share diluted
-- Ongoing investment in PlayBook and QNX-based platform development in Q1
with PlayBook launch date of April 19th
-- BlackBerry was the number one selling smartphone brand in the United
States(1), Canada(1), Latin America(1) and the UK(2) for calendar 2010

Q4 and Fiscal 2011 Results:Revenue for the fiscal year ended February 26, 2011 was $19.9 billion, up 33% from $15 billion last year. Revenue for the fourth quarter of fiscal 2011 was $5.6 billion, up 1% from $5.5 billion in the previous quarter and up 36% from $4.1 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 81% for devices, 16% for service, and 3% for software and other revenue. During the quarter, RIM shipped approximately 14.9 million BlackBerry smartphones for a total of 52.3 million smartphones in fiscal 2011."We are pleased to report record shipments and financial performance in fiscal 2011," said Jim Balsillie, Co-CEO at Research In Motion. "As we enter fiscal 2012, RIM is in an excellent position to benefit from the continuing convergence of the mobile communications and mobile computing markets. We are laying a strong foundation for RIM's expanding market opportunity through focused investments and we are extremely excited about our smartphone, tablet and platform roadmaps."Net income for fiscal 2011 was $3.4 billion, or $6.34 per share diluted, up 47% over fiscal 2010. The Company's net income for the quarter was $934 million, or $1.78 per share diluted, compared with net income of $911 million, or $1.74 per share diluted, in the prior quarter and net income of $710 million, or $1.27 per share diluted, in the same quarter last year.The total of cash, cash equivalents, short-term and long-term investments was $2.7 billion as of February 26, 2011, compared to $2.5 billion at the end of the previous quarter, an increase of $227 million from the prior quarter. Cash flow from operations in Q4 was approximately $1.0 billion. Uses of cash included intangible asset additions of approximately $365 million, capital expenditures of approximately $304 million and business acquisitions of approximately $161 million.FY2012 and Q1 Outlook:For the full year fiscal 2012, RIM expects earnings per share to be in excess of $7.50 fully diluted. Revenue for the first quarter of fiscal 2012 ending May 28, 2011 is expected to be in the range of $5.2-$5.6 billion. Gross margin percentage for the first quarter is expected to be approximately 41.5%. Earnings per share for the first quarter are expected to be in the range of $1.47 -$1.55 per share diluted. This guidance range reflects a mix shift in handset towards lower ASP products in the first quarter and an increased level of investment in Research and Development and Sales and Marketing related to our tablet and platform initiatives. The guidance range is slightly wider than normal to reflect the risk of potential disruption in RIM's supply chain as a result of the recent earthquake in Japan.Conference Call and Webcast:A conference call and live webcast will be held beginning at 5 pm ET, March 24, 2011, which can be accessed by dialing 1-800-814-4859 (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 24, 2011 until midnight ET, April 7, 2011. It can be accessed by dialing 416-640-1917 and entering passcode 4310316#. 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.About Research In Motion (RIM)Research In Motion (RIM), a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry® solution in 1999. Today, BlackBerry products and services are used by millions of customers around the world to stay connected to the people and content that matter most throughout their day. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe, Asia Pacific and Latin America. RIM is listed on the NASDAQ Stock Market (NASDAQ:RIMM - News) and the Toronto Stock Exchange (TSX:RIM - News). 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 and earnings expectations for the first quarter of fiscal 2012, its current expectations for earnings growth for the full year of fiscal 2012, anticipated customer demand, the potential growth opportunity from the convergence of mobile communications and mobile computing markets, product initiatives and timing, and anticipated growth, opportunities relating to new products and technology. The terms and phrases "growth opportunity", "capitalize", "foundations for the future", "expect", 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 RIM's intellectual property rights; RIM's ability to enhance current products and develop new products and services; risks related to delays in new product launches; risks related to intense competition; RIM's reliance on carrier partners, third-party manufacturers, third-party network developers and suppliers, including potential risks to RIM's supply chain for functional components caused by the recent earthquake in Japan; risks relating to network disruptions and other business interruptions; RIM's reliance on key personnel; risks related to third party manufacturers and RIM's ability to manage its production processes; risks related to RIM's international operations; security risks and risks related to encryption technology; potential defects in RIM's products; RIM's ability to manage inventory and other asset risk; RIM's ability to maintain and enhance its brand; RIM's ability to successfully enter the tablet market; RIM's ability to manage growth; and difficulties in forecasting RIM's quarterly financial results, particularly over longer periods given the rapid technological changes, evolving industry standards, intense competition and short product life cycles that characterize the wireless communications industry.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.(1) IDC Worldwide Mobile Phones Quarterly Tracker - Final data - Q4 2010(2) GfK RT, Smartphones, Volume Sales, 2010 and Q4 2010
 

Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions except for share and per share amounts)
(unaudited)

Consolidated Statements of Operations

For the three months ended For the year ended
--------------------------------- ----------------------
February November February February February
26, 2011 27, 2010 27, 2010 26, 2011 27, 2010
----------------------------------------------------- ----------------------


Revenue $ 5,556 $ 5,495 $ 4,080 $ 19,907 $ 14,953
Cost of sales 3,103 3,101 2,217 11,082 8,369
--------------------------------- ----------------------
Gross margin 2,453 2,394 1,863 8,825 6,584
--------------------------------- ----------------------

Gross margin % 44.2% 43.6% 45.7% 44.3% 44.0%

Operating expenses
Research and
development 383 357 267 1,351 965
Selling, marketing
and
administration 705 666 498 2,400 1,907
Amortization 125 115 86 438 310
Litigation - - - - 164
--------------------------------- ----------------------
1,213 1,138 851 4,189 3,346
--------------------------------- ----------------------

Income from
operations 1,240 1,256 1,012 4,636 3,238
Investment income
(loss), net (1) 3 (11) 5 8 28
--------------------------------- ----------------------

Income before income
taxes 1,243 1,245 1,017 4,644 3,266

Provision for income
taxes 309 334 307 1,233 809
--------------------------------- ----------------------

Net income $ 934 $ 911 $ 710 $ 3,411 $ 2,457
--------------------------------- ----------------------
--------------------------------- ----------------------

Earnings per share
Basic $ 1.79 $ 1.74 $ 1.27 $ 6.36 $ 4.35
--------------------------------- ----------------------
--------------------------------- ----------------------
Diluted $ 1.78 $ 1.74 $ 1.27 $ 6.34 $ 4.31
--------------------------------- ----------------------
--------------------------------- ----------------------

Weighted-average
number of shares
outstanding (000's)
Basic 522,764 522,436 557,114 535,986 564,492
Diluted 524,334 524,406 561,130 538,330 569,759

Total common shares
outstanding (000's) 523,869 521,776 557,328 523,869 557,328

(1) For the three months ended November 27, 2010, investment income (loss),
net reflects a charge of approximately $17 million relating to the
impairment of certain investments.


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

Consolidated Balance Sheets

As at
----------------------------
February 26, February 27,
2011 2010
----------------------------------------------------------------------------

Assets
Current
Cash and cash equivalents $ 1,791 $ 1,551
Short-term investments 330 361
Accounts receivable, net 3,955 2,594
Other receivables 324 206
Inventories 618 660
Other current assets 241 247
Deferred income tax asset 229 194
----------------------------
7,488 5,813


Long-term investments 577 958
Property, plant and equipment, net 2,504 1,957
Intangible assets, net 1,798 1,326
Goodwill 508 151
----------------------------
$ 12,875 $ 10,205
----------------------------
----------------------------

Liabilities
Current
Accounts payable $ 832 $ 615
Accrued liabilities 2,511 1,638
Income taxes payable 179 96
Deferred revenue 108 68
Deferred income tax liability - 15
----------------------------
3,630 2,432

Deferred income tax liability 276 141
Income taxes payable 31 29
----------------------------
3,937 2,602
----------------------------

Shareholders' Equity
Capital stock and additional paid-in capital 2,359 2,372
Treasury stock (160) (94)
Retained earnings 6,749 5,274
Accumulated other comprehensive income (loss) (10) 51
----------------------------
8,938 7,603
----------------------------
$ 12,875 $ 10,205
----------------------------
----------------------------


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

Consolidated Statements of Cash Flows

For the year ended
------------------------------------
February 26, February 27,
2011 2010
----------------------------------------------------------------------------

Cash flows from operating activities
Net income $ 3,411 $ 2,457

Adjustments to reconcile net income to
net cash provided by operating
activities:
Amortization 927 616
Deferred income taxes 92 51
Income taxes payable 2 5
Stock-based compensation 72 58
Other 1 9
Net changes in working capital items (496) (161)
------------------------------------
Net cash provided by operating
activities 4,009 3,035
------------------------------------
Cash flows from investing activities
Acquisition of long-term investments (784) (863)
Proceeds on sale or maturity of long-
term investments 893 473
Acquisition of property, plant and
equipment (1,039) (1,009)
Acquisition of intangible assets (557) (421)
Business acquisitions, net of cash
acquired (494) (143)
Acquisition of short-term investments (503) (477)
Proceeds on sale or maturity of short-
term investments 786 970
------------------------------------
Net cash used in investing activities (1,698) (1,470)
------------------------------------
Cash flows from financing activities
Issuance of common shares 67 30
Tax benefits (deficiencies) related to
stock-based compensation (1) 2
Purchase of treasury stock (76) (94)
Common shares repurchased (2,077) (775)
Repayment of debt - (6)
------------------------------------
Net cash used in financing activities (2,087) (843)
------------------------------------
Effect of foreign exchange gain (loss)
on cash and cash equivalents 16 (6)
------------------------------------
Net increase in cash and cash
equivalents for the year 240 716
Cash and cash equivalents, beginning of
year 1,551 835
------------------------------------
Cash and cash equivalents, end of year $ 1,791 $ 1,551
------------------------------------
------------------------------------

February 26, November 27,
As at 2011 2010
----------------------------------------------------------------------------

Cash and cash equivalents $ 1,791 $ 1,435
Short-term investments 330 340
Long-term investments 577 696
------------------------------------
$ 2,698 $ 2,471
------------------------------------
------------------------------------

Contact:


Contacts:
Media Contact:
Marisa Conway
Brodeur (PR Agency for RIM)
(212) 336-7509
mconway@brodeur.com
Investor Contact:
RIM Investor Relations
(519) 888-7465
investor_relations@rim.com
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