RESEARCH IN MOTION REPORTS THIRD QUARTER RESULTS

Transcription

1 FOR IMMEDIATE RELEASE December 21, RESEARCH IN MOTION REPORTS THIRD QUARTER RESULTS Waterloo, Ontario 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 27, (all figures in U.S. dollars and U.S. GAAP). Revenue for the third quarter of fiscal 2005 was $365.9 million, up 18% from $310.2 million in the previous quarter and up 138% from $153.9 million in the same quarter of last year. The revenue breakdown for the quarter was approximately 71% for handhelds, 17% for service, 7% for software licences and 5% for other revenue. The total number of BlackBerry subscribers increased by approximately 387,000 from the prior quarter to approximately 2,044,000 subscribers. "RIM and its partners completed an extremely active quarter with a wide range of new product introductions and regional launches around the world," said Jim Balsillie, Chairman and Co-CEO at RIM. "Solid subscriber growth topped the two million mark during the quarter and we are steadily scaling our business to broaden customer reach further with the addition of new carrier partnerships, new product offerings and new application extensions." Net income for the quarter was $90.4 million, or $0.46 per share diluted, compared to net income of $70.6 million, or $0.36 per share diluted in the prior quarter, and net income of $16.3 million or $0.10 per share diluted in the same quarter of last year. Higher revenues and operating efficiencies contributed to the strong net income growth during the quarter. Excluding the litigation provision of $24.6 million, or $0.12 per share diluted, the Company s adjusted net income and adjusted diluted earnings per share was $114.9 million or $0.58 per share diluted. The adjusted net income and adjusted diluted earnings per share do not have any standardized meaning prescribed by GAAP and thus are not comparable to similar measures presented by other companies. These adjusted measures should be considered in the context of RIM's GAAP results. As previously disclosed, RIM recently received a ruling from the U.S. Court of Appeal for the Federal Circuit in the NTP Inc. vs. RIM litigation. Details of this ruling are available in the press release issued by the Company on December 14, and in the Material Change report and Form 6-K RIM filed with the regulators on December 15,. RIM is updating revenue and earnings guidance for the upcoming two quarters. Revenue in the fourth quarter of fiscal 2005 is currently expected to be in the range of $390-$410 million. Revenue for the first quarter of fiscal 2006 is currently expected to be in the range of $430-$455 million. RIM is now expecting GAAP earnings per share (EPS) for the fourth quarter to be higher than previously forecasted, in the range of $0.48-$0.54 per share diluted and adjusted EPS, excluding the patent litigation provision, in the range of $0.60-$0.67 per share. For the first quarter of fiscal 2006 RIM is expecting EPS to be between $0.51-$0.57 per share diluted on a GAAP basis and $0.64-$0.71 adjusted. The total of cash, cash equivalents, short-term and long-term investments was $1.64 billion as at November 27,, compared to $1.59 billion at the end of the previous quarter.

2 Highlights of the third quarter: BlackBerry surpassed the two million subscribers milestone. RIM previewed a new BlackBerry handheld for WLAN networks. RIM introduced the new BlackBerry 7100 Series with SureType keyboard technology. T-Mobile launched the BlackBerry 7100t in the U.S. Sprint launched BlackBerry in the U.S. Cingular launched the BlackBerry 7290 in the U.S. Earthlink Wireless launched the BlackBerry 7750 in the U.S. Dobson Communications launched BlackBerry in the U.S. Velocita Wireless launched the BlackBerry 5790 in the U.S. Rogers Wireless launched the BlackBerry 7100r and BlackBerry 7290 in Canada. Cable & Wireless announced plans to introduce BlackBerry in Barbados and offer BlackBerry Internet Service in the Cayman Islands. Vodafone launched the BlackBerry 7100v in Europe and Australasia. Vodafone launched BlackBerry in Portugal. BT announced plans to offer BlackBerry in Europe. O2 launched the BlackBerry 7290 in Europe. E-Plus launched BlackBerry in Germany. KPN launched BlackBerry in the Netherlands. Proximus launched the BlackBerry Enterprise Solution in Belgium. Polska Telefonica Cyfrowa announced plans to introduce BlackBerry in Poland. China Mobile and RIM signed an initial Letter of Agreement focused on bringing BlackBerry to China Mobile's GSM/GPRS customers. Vodafone launched BlackBerry Internet Service in Australia. Globe Telecom launched BlackBerry Internet Service in the Philippines. Airtel launched BlackBerry in India. MTN announced plans to offer BlackBerry in South Africa. Vodacom announced plans to offer BlackBerry in South Africa. RIM announced plans to offer an aftermarket BlackBerry Connect software download for the Palm OS. RIM and PalmSource announced plans to make APIs related to BlackBerry Connect available to Palm OS developers. Nokia announced plans to offer BlackBerry Connect support on Symbian OS-based Series 80 mobile devices. Telefónica Móviles launched BlackBerry Connect for the Nokia 6820 in Spain. O2 announced plans for the XDA II and BlackBerry Connect. BlackBerry ISV Alliance partners 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 . Highlights subsequent to quarter end: RIM announced the availability of BlackBerry Enterprise Server v4.0 for Microsoft Exchange and IBM Lotus Domino and introduced the new Java Development Environment for BlackBerry v4.0. RIM announced that it is working with members of the BlackBerry ISV Alliance Program to enable location-enhanced applications for the BlackBerry platform. Nextel launched the BlackBerry 7520 in the U.S. and announced plans to enable location-based services on the BlackBerry platform.

3 Telcel launched the BlackBerry 7280 in Mexico. T-Mobile Deutschland launched BlackBerry Connect, the BlackBerry 7100t, the BlackBerry 7290 and BlackBerry Enterprise Server v4.0 in Germany. Orange France launched the BlackBerry 7290 and BlackBerry Internet Service in France. BASE launched BlackBerry in Belgium. CSL launched the BlackBerry 7290 and BlackBerry Enterprise Server v4.0 in Hong Kong. Hutchison Telecom launched the BlackBerry 7290 and BlackBerry Enterprise Server v4.0 in Hong Kong. Maxis introduced BlackBerry in Malaysia. StarHub launched the BlackBerry 7290 and BlackBerry Enterprise Server v4.0 in Singapore. Singtel launched BlackBerry Internet Service in Singapore. Indosat and StarHub announced plans to offer BlackBerry in Indonesia. BT Mobile introduced BlackBerry Built-In to U.K. customers. T-Mobile International introduced BlackBerry Built-In and BlackBerry Connect in Europe. The U.S. Court of Appeal for the Federal Circuit entered a ruling in the NTP Inc. vs. RIM patent litigation. A stipulated judgment was entered in the InPro II Licensing, S.a.r.l. vs. RIM patent litigation matter. The replay of RIM s Q3 conference call can be accessed after 7 p.m. (eastern), December 21, until midnight (eastern), January 7, It can be accessed by dialing and entering passcode #. The conference will also appear on the RIM web site, live at 5:00 p.m. (eastern) and archived at until midnight January 11, 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 , 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 or ### Media Contact: Courtney Flaherty Brodeur Worldwide for RIM cflaherty@brodeur.com Investor Contact: RIM Investor Relations investor_relations@rim.com This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 relating to RIM's revenue and earnings expectations for the fourth quarter of fiscal 2005 and the first quarter of fiscal The phrases " currently expected to be ", "RIM is now expecting " and " RIM is expecting " are intended to identify these forward-looking statements.

4 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: the outcome of RIM's ongoing litigation with NTP, Inc.; other risks relating to RIM's intellectual property; RIM's ability to enhance current products and develop new products; RIM's reliance on carrier partners, third-party network developers and suppliers; and intense competition. These risk factors and others relating to RIM's business and industry 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. 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.

5 Research In Motion Limited Incorporated under the Laws of Ontario (United States dollars, in thousands except per share data) Consolidated Statements of Operations (unaudited) November 27, For the three months ended August 28, November 29, 2003 Revenue $ 365,852 $ 310,182 $ 153,891 Cost of sales 174, ,501 81,493 Gross margin 191, ,681 72,398 Gross margin % 52.3% 51.2% 47.0% Expenses Research and development 27,137 24,588 15,673 Selling, marketing and administration 49,297 44,016 26,233 Amortization 8,337 9,442 7,226 Litigation 24,551 18,304 9, ,322 96,350 58,333 Income from operations 81,973 62,331 14,065 Investment income 10,133 8,588 2,264 Income before income taxes 92,106 70,919 16,329 Provision for income taxes 1, Net income $ 90,395 $ 70,593 $ 16,329 Earnings per share Basic $ 0.48 $ 0.38 $ 0.10 Diluted $ 0.46 $ 0.36 $ 0.10 Weighted average number of common shares outstanding (000 s) Basic 188, , ,842 Diluted 197, , ,050

6 Research In Motion Limited Incorporated under the Laws of Ontario (United States dollars, in thousands except per share data) Consolidated Balance Sheets As at November 27, February 28, (unaudited) (audited) Assets Current Cash and cash equivalents $ 734,197 $ 1,156,419 Short-term investments 80,370 - Trade receivables 178,229 95,213 Other receivables 24,565 12,149 Inventory 89,123 42,836 Restricted cash 89,902 36,261 Other current assets 39,970 12,527 1,236,356 1,355,405 Investments 829, ,886 Capital assets 174, ,709 Intangible assets 65,383 64,269 Goodwill 30,109 30,109 $ 2,336,031 $ 1,931,378 Liabilities Current Accounts payable and accrued liabilities $ 167,725 $ 106,108 Accrued litigation and related expenses 141,838 84,392 Income taxes payable 3,511 1,684 Deferred revenue 16,996 16,498 Current portion of long-term debt , ,875 Long-term debt 6,914 6, , ,115 Shareholders equity Share capital 1,879,094 1,829,388 Retained earnings (accumulated deficit) 96,754 (119,206) Accumulated other comprehensive income 22,968 6,081 Total shareholders equity 1,998,816 1,716,263 $ 2,336,031 $ 1,931,378

7 Research In Motion Limited Incorporated under the Laws of Ontario (United States dollars, in thousands except per share data) Condensed Consolidated Statement of Cash Flows (unaudited) For the three months ended Nov. 27, For the nine months ended Nov. 27, Cash flows from operating activities Net income $ 90,395 $ 215,960 Items not requiring an outlay of cash: Amortization 15,741 50,535 Loss (gain) on foreign currency translation of long-term debt (15) , ,512 Net changes in non-cash working capital items (33,830) (76,987) 72, ,525 Cash flows from financing activities Issuance of share capital 17,958 49,706 Repayment of debt (51) (146) 17,907 49,560 Cash flows from investing activities Acquisition of investments (134,628) (562,990) Proceeds on sale or maturity of investments 3,861 13,924 Acquisition of capital assets (25,252) (62,163) Acquisition of intangible assets, net (5,827) (14,275) Acquisition of subsidiaries - (2,149) Acquisition of short-term investments (72) (40,263) Proceeds on sale and maturity of short-term investments 6,609 6,609 (155,309) (661,307) Net decrease in cash and cash equivalents for the period (65,111) (422,222) Cash and cash equivalents, beginning of period 799,308 1,156,419 Cash and cash equivalents, end of period $ 734,197 $ 734,197 As at Nov. 27, As at Aug. 28, Cash and cash equivalents $ 734,197 $ 799,308 Short-term investments 80,370 71,542 Investments 829, ,378 $ 1,644,114 $ 1,591,228