Blackberry 2004 Annual Report Download - page 19

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For the years ended February 28, 2004, March 1, 2003 and March 2, 2002
Fiscal 2003 Year
Fourth Quarter Third Quarter Second Quarter First Quarter
(in thousands, except per share data)
Revenue $ 87,502 $ 74,176 $ 73,418 $ 71,636
Gross margin(1) 35,894 28,988 29,098 25,463
Research and development, Selling,
marketing and administration(1),
and Amortization(1) 43,948 52,434 44,872 41,964
Restructuring charge(3) – 6,550 – –
Litigation(2) 25,540 27,760 4,910 –
Investment income (2,498) (2,901) (2,877) (3,154)
Loss before income taxes (31,096) (54,855) (17,807) (13,347)
Provision for (recovery of) income taxes(4) – 37,937 (3,575) (2,610)
Net loss $ (31,096) $ (92,792) $ (14,232) $ (10,737)
Loss per share - basic and diluted $ (0.40) $ (1.21) $ (0.18) $ (0.14)
Research and development $ 12,535 $ 16,843 $ 13,913 $ 12,625
Selling, marketing and administration(1) 24,979 29,979 25,213 24,807
Amortization(1) 6,434 5,612 5,746 4,532
$ 43,948 $ 52,434 $ 44,872 $ 41,964
Notes:
(1) During the third quarter of fiscal 2004, the Company reclassified costs associated with its BlackBerry network operations centre and its
technical and service support operations centre to Cost of sales. Such costs were previously included in Selling, marketing and administration
expense. In addition, amortization expense related to manufacturing operations and BlackBerry network operations has been reclassified to
Cost of sales. Such amortization was previously included in Amortization expense. All comparative amounts were reclassified to conform to
this new presentation. There were no adjustments to previously reported net income (loss) as a result of any of these reclassifications.
(2) See “Results of Operations – Litigation” and note 16 to the Consolidated Financial Statements.
(3) See “Results of Operations – Restructuring Charges” and note 15 to the Consolidated Financial Statements.
(4) See “Results of Operations – Income Taxes” and note 9 to the Consolidated Financial Statements.
Events Subsequent to February 28, 2004 Year End
Settlement of Patent Litigation
Good Technology, Inc. (“GTI”) and the Company
entered into an agreement on March 26, 2004
whereby the parties also signed a settlement and
license agreement and a series of pending lawsuits
between the two companies were consequently
dismissed. The parties have also signed a royalty-
bearing license agreement whereby RIM will receive
a lump-sum settlement during the first quarter of
fiscal 2005 as well as ongoing quarterly royalties.
The lump-sum settlement amount was received
subsequent to February 28, 2004 and will be
credited to Intangible Assets in the first quarter of
fiscal 2005, as a recovery of costs incurred by the
Company. The settlement will resolve this matter
and the settlement amounts will not be material to
the Company’s consolidated financial statements.
Stock Split
On April 7, 2004, the Company announced that its
Board of Directors had approved a two-for-one stock
split of the Company’s outstanding common shares.
The stock split will be implemented by way of a
stock dividend whereby shareholders will receive one
common share of the Company for each common
share held. The stock dividend will be payable on
June 4, 2004 to shareholders of record at the close
of business on May 27, 2004. The total number of
common shares outstanding as of February 28,
2004 was 92.4 million. Adjusting for the stock
split, the total number of common shares
outstanding will be 184.8 million.