Blackberry 1999 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... Exchange Listings Nasdaq National Market Symbol: RIMM The Toronto Stock Exchange Symbol: RIM Corporate Office Research In Motion Limited 295 Phillip Street Waterloo, Ontario, N2L 3W8 Corporate Web Site www.rim.net Research In Motion, RIM, the RIM logo, Inter@ctive, Inter@ctive Pager, BlackBerry...

  • Page 3
    ... 28, 1999 1998* Income Statement Data Revenue Gross Profit Net Income Earnings Per Share (basic and fully diluted) Operating Data (Percentage of revenue) Gross Margin Gross Research and Development Selling, Marketing and Administration Balance Sheet Data Total Assets Shareholders' Equity $ $ 175...

  • Page 4
    ...the end user for software support and monthly airtime. Management believes that BlackBerry will change the way people manage their email and personal information. BlackBerry will be a significant part of RIM's business plan going forward. RIM continued its focus on research and development by almost...

  • Page 5
    ... on the successes of fiscal 1999, there are two critical areas of focus over the upcoming year: catalyzing demand for wireless messaging and the solid execution of RIM's business plan. 10 8 6.5 CATALYZING DEMAND FOR WIRELESS MESSAGING 6 4.5 4 2.5 Product reviews, awards, and ongoing beta trials...

  • Page 6
    ... channels for RIM's handheld devices. One of RIM's main focuses in fiscal 2000 is to roll out BlackBerry service throughout North America. To support the launch of BlackBerry, RIM has built a distribution channel comprised of Microsoft Exchange Value Added Resellers (VARs) who deal directly with...

  • Page 7
    ... has 40 students working through university co-op programs and will continue to increase that number. In addition to technical personnel, RIM is aggressively recruiting people with expertise in such areas as marketing, sales, production and finance. RIM's employees, management, and directors thank...

  • Page 8
    ... engineering result in cost-effective radios that have powerful transmitters, sensitive receivers, small size and long battery life. RIM Products/Markets Top left: Inter@ctive Pager Top right: Wireless PC Card Bottom left: OEM Radio Modem Bottom right: BlackBerry Wireless Email Solution...

  • Page 9
    ... separately from any other email accounts that the user might have. This target market for RIM's products is made up of one-way paging users who want the functionality of two-way messaging without any trade-offs in size, cost, coverage, or battery life. Network operators distribute this solution...

  • Page 10
    .../ Stock Quotes & Trading • Remote Database • Web Content Providers • >300 Developers Mobile Computing • Laptops & Notebooks • Handheld Computers • Windows CE • Ruggedized Terminals In-Vehicle Communications In-Car Computing • Mobile Gateway Asset Tracking • Vehicle Location Other...

  • Page 11
    ...receive stock quotes, news updates, and to actually trade on the Inter@ctive Pager 950. "Research In Motion Ltd.'s pocket-sized BlackBerry two-way wireless device is a good pick for employees who are frequently out of the office but need to keep up on their Microsoft Corp. Exchange email" - PC Week...

  • Page 12
    ... have obtained RIM's Software Developer Kit to assist them in writing programs for the Inter@ctive Pager platform. In addition to those already described, many more developers have written applications for web browsing, dispatching, games, database access, debit and credit card processing, the real...

  • Page 13
    ...supplier for wireless capability. As an example of wireless point-of-sale, customers can pay for their pizza at their door using a credit or debit card over a handheld terminal developed by Lipman. Ademco, the largest alarming company in the world, has chosen RIM's radios for their wireless alarming...

  • Page 14
    BlackBerry Email Volume and Importance Grows Email is a tremendous messaging and collaboration tool and has become a fundamental means of communication. In fact, email has become the predominant method of business communication, even exceeding the telephone. Experts are forecasting that wireless ...

  • Page 15
    ...also voice displeasure with these solutions. The challenge of managing modem banks and Remote Access servers and the risk of opening an inbound path into the corporate network topped their list of concerns. Supporting dial-up PDAs is seen by many as too risky because of the lack of security software...

  • Page 16
    ...OEM Modems for Ruggedized Notebooks - December, 1998 RIM Inter@ctive Pager 950 Receives Andrew Seybold Group Outlook Award - December, 1998 RIM Introduces BlackBerryâ„¢, a Wireless Email Solution for Microsoft Exchange Users - January, 1999 Research In Motion Wins the 1998 Market Engineering Product...

  • Page 17
    ... year as RIM successfully developed and launched the Inter@ctive Pager 950 while continuing to supply OEM radio modems to new and existing customers. Tight execution of RIM's business plan contributed to the success of fiscal 1999. Growing demand for wireless messaging products, new contract wins...

  • Page 18
    ... Partnerships Canada program and investment tax credits. This compares to $2.0 million received in government R&D assistance in fiscal 1998. RIM will continue to use these external parties as sources of financing to promote development of future generation concepts and designs. SELLING, MARKETING...

  • Page 19
    ... tax loss carryforwards and investment tax credits (ITCs). In addition, the Company can claim further tax deductions for past financing costs related to the issuance of shares. RIM used loss carry-forwards to reduce its provision for income taxes to $3.3 million in fiscal 1999. In addition, the...

  • Page 20
    ..., email systems, telephone and voice mail systems and all corporate file servers have been assessed and all related remedial actions and testing are targeted for completion by mid-1999. The Company expects to complete its review, remediation and testing of other Year 2000 systems by this time as...

  • Page 21
    ... such as stock quotes, news, and trading services, remote database management, games, dispatch applications, web "browser" and information retrieval applications, as well as many other programs written for specific vertical niches. RIM's commitment to research and development will continue...

  • Page 22
    ... Financial Officer Waterloo, Ontario Auditors' Report TO THE SHAREHOLDERS OF RESEARCH IN MOTION LIMITED We have audited the balance sheets of Research In Motion Limited as at February 28, 1999 and 1998 and the statements of operations and retained earnings and cash flows for each of the years in...

  • Page 23
    RESEARCH IN MOTION LIMITED Incorporated Under the Laws of Ontario Canadian dollars, in thousands Balance Sheets As at February 28, 1999 1998 ASSETS Current Cash and cash equivalents Marketable securities (note 2) Amounts receivable (note 3) Inventory (note 4) Prepaid expenses (note 5) $ 14,320 ...

  • Page 24
    ... of Operations and Retained Earnings For the years ended February 28, 1999 1998 1997 Revenue Cost of Sales Gross Profit Expenses Research and development net of government assistance of $5,269 (1998 - $2,041, 1997 - $2,234) Administration and marketing Amortization $ 70,483 42,829 27,654...

  • Page 25
    RESEARCH IN MOTION LIMITED Incorporated Under the Laws of Ontario Canadian dollars, in thousands, except for earnings per share Statements of Cash Flows For the years ended February 28, 1999 1998 1997 Cash Flows from Operating Activities Net income for the year Item not requiring an outlay of cash...

  • Page 26
    ... of developing, manufacturing and supplying radios and other network access devices for use in wireless data communications systems. The Company was incorporated on March 7, 1984 under the Ontario Business Corporations Act. The Company's shares trade publicly on the Toronto Stock Exchange under...

  • Page 27
    ...Partnerships Canada and in the form of investment tax credits. Assistance related to the acquisition of capital assets used for research and development is credited against the related capital assets and all other assistance is credited against related expenses. (l) Earnings per share Basic earnings...

  • Page 28
    ... 87% of trade receivables (1998 - 6 customers, 87%). In addition, sales to the Company's major customer accounts for 69% of total sales. Over 90% of sales are to customers outside of Canada. 4. INVENTORY Inventory is comprised as follows (in thousands): 1999 1998 Raw materials Work in process...

  • Page 29
    RESEARCH IN MOTION LIMITED Incorporated Under the Laws of Ontario Canadian dollars, in thousands, except for earnings per share 6. CAPITAL ASSETS Capital assets are comprised as follows (in thousands): 1999 Accumulated Cost amortization Net book value Furniture, fixtures, tooling and equipment ...

  • Page 30
    ... deduction of the financing costs will be credited directly to share capital. Any benefits related to investment tax credits claimed for capital asset acquisitions will be credited to capital assets. Any other benefits of these carryforwards will be credited to income in the year of recognition. The...

  • Page 31
    RESEARCH IN MOTION LIMITED Incorporated Under the Laws of Ontario Canadian dollars, in thousands, except for earnings per share 10. CAPITAL STOCK (a) Share capital The Company has an unlimited number of authorized non-voting, redeemable, retractable Class A common shares, an unlimited number of ...

  • Page 32
    ... Technology Partnerships Canada ("TPC") is subject to royalty payments of 2.2% of gross product revenues based on future sales related to the technology funded. The first royalty payment is due 46 days after February 28, 2000. If by February 28, 2003, the royalty payments paid or due are equal to...

  • Page 33
    RESEARCH IN MOTION LIMITED Incorporated Under the Laws of Ontario Canadian dollars, in thousands, except for earnings per share 14. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE The Year 2000 issue arises because many computerized systems use two digits rather than four to identify a year. Date sensitive...

  • Page 34
    ... from non-owner sources, and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company does not have any reportable items of comprehensive income other than its net income. (c) Accounting for stock compensation Under...

  • Page 35
    ...Director of several corporations including Dominion of Canada General Insurance, Empire Life, The Bank of Nova Scotia, McCain Foods, United Corporations, Strongco, InternetSecure and the University of Toronto Press. Jim Estill1 President & Chief Executive Officer, EMJ Data Systems Ltd., a wholesaler...

  • Page 36
    RESEARCH IN MOTION LIMITED 295 Phillip Street Waterloo, Ontario, Canada N2L 3W8 Tel. 1 519 888 7465 • Fax 1 519 888 6906 • web site www.rim.net