Blackberry 2000 Annual Report Download - page 15

Overview
In fiscal 2000, Research In Motion grew to be
an internationally-recognized leader in wireless
communications. The launch of the BlackBerry wireless
email solution in January 1999 proved to be a main
revenue-driver for RIM, growing to an impressive 41% of
revenue in the fourth quarter. We anticipate BlackBerry
will continue to drive the Company’s growth in the future
with the development of new software and hardware.
Tight execution of RIM’s business plan contributed to
the success of fiscal 2000. During fiscal 2000, the
Company developed and introduced the BlackBerry
Internet Edition, the BlackBerry Exchange Server, the
RIM 850 and RIM 957 handhelds and the RIM 802D™
and RIM 902M™ radio modems.
Driving adoption of these products is RIM’s ability
to foster key strategic relationships with large computer
manufacturers and Internet Service Providers, in order
to enhance penetration into BlackBerry target markets.
Revenue for the year increased to $85.0 million from
$47.3 million in the previous year and net income
increased to $10.5 million from $6.4 million.
RIM’s revenues are generated through a number of
sources. Sales of wireless handhelds to large corporate
customers and network operators continue to
be significant revenue streams for the Company. With
the launch of BlackBerry, the Company now includes
recurring monthly revenues for BlackBerry rentals and
service in each quarter. In addition, revenue is generated
from the sales of enterprise servers and user licenses.
Other sources of revenue were sales of radio modems to
OEM manufactures, software licences and non-recurring
engineering development services and sales of wireless
PC cards.
Sales and marketing channels include direct sales
to corporate customers, distribution by computer
manufacturers and Internet service providers and
distribution by value-added resellers for the BlackBerry
solution.
Basis of Presentation
During the year, the Company incorporated wholly-
owned subsidiaries to hold investments in real property
and other property. The consolidated financial statements
include the accounts of the subsidiaries with inter-
company transactions and balances eliminated.
Effective September 1, 1999, as a result of the
Company’s increased economic activity in the U.S., the
U.S. dollar has become the functional currency of the
Company’s operations. Effective the same date, the U.S.
dollar has also been adopted as the reporting currency. All
balances for periods up to and including August 31, 1999
have been restated into U.S. dollars, in accordance with
accounting principles generally accepted in Canada, using
the August 31, 1999 closing exchange rate being a rate
of Cdn. $1.4888 per U.S. $1.00. For periods subsequent
to August 31, 1999, transactions which have occurred in
currencies other than U.S. dollars have been converted to
U.S. dollars at the exchange rate in effect at the
transaction date. Carrying values of monetary balances
that were not U.S. dollars were converted at the U.S. rate
at the balance sheet date and the resulting exchange gain
or loss was included in income.
Results of Operations
Operating Highlights Fiscal Fiscal
(U.S. $000’s) 2000 1999
Revenue $ 84,967 $ 47,342
Gross Margin 36,393 18,575
Net Income 10,498 6,409
13
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Research In Motion Limited ■Incorporated Under the Laws of Ontario