• RIM's Year-Ending Financial Report

    Attachment 34577

    Delivered graciously to our ever-ready PinStack Inbox. I stopped reading after I saw the phrases "down 19% from the third quarter" and "down 21% from Q3" because I was afraid I would burst into tears. I still love my Bold! Here's the release. I cleaned as much blood off of it as I could before publishing:

    Press Release
    WATERLOO, ONTARIO–(Marketwire – March 29, 2012) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported fourth quarter results for the three months and fiscal year ended March 3, 2012 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

    Highlights:
    • $2.1 billion in cash, cash equivalents, short-term and long-term investments at the end of the quarter, which increased by approximately $610 million in the quarter
    • Cash flow from operations of approximately $1.1 billion, up from approximately $900 million in Q3
    • Revenue of $4.2 billion, down 19% from the third quarter
    • GAAP net loss in Q4 of $125 million or $0.24 per share diluted; adjusted net income of $418 million or $0.80 per share diluted
    • BlackBerry smartphone shipments of 11.1 million in Q4, down 21% from Q3
    • RIM to discontinue providing specific quantitative guidance
    • RIM provides update on organizational changes
    Q4 Results:

    Revenue for the fourth quarter of fiscal 2012 was $4.2 billion, down 19% from $5.2 billion in the previous quarter and down 25% from $5.6 billion in the same quarter of fiscal 2011. The revenue breakdown for the quarter was approximately 68% for hardware, 27% for service and 5% for software and other revenue. During the quarter, RIM shipped approximately 11.1 million BlackBerrysmartphones and over 500,000 BlackBerry PlayBook tablets.


    “I have assessed many aspects of RIM’s business during my first 10 weeks as CEO. I have confirmed that the Company has substantial strengths that can be further leveraged to improve our financial performance, including RIM’s global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers. I’m very excited about the prospects for the BlackBerry 10 platform, which is on track for the latter part of calendar 2012. Notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant and I am taking the necessary steps to address them,” said Thorsten Heins, President & CEO of Research In Motion.

    “In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM’s key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline. In parallel, we are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.”


    The Company’s GAAP net loss for the fourth quarter of fiscal 2012 was $125 million, or $0.24 per share diluted, compared with GAAP net income of $265 million, or $0.51 per share diluted, in the prior quarter and GAAP net income of $934 million, or $1.78 per share diluted, in the same quarter of fiscal 2011. Adjusted net income for the fourth quarter was $418 million, or $0.80 per share diluted. Adjusted net income and adjusted diluted earnings per share for the fourth quarter exclude the impact of pre-tax charges of $355 million which are predominantly non-cash ($346 million after tax) for the impairment of goodwill and $267 million ($197 million after-tax) for an inventory provision taken primarily on certain BlackBerry7 products. These charges and their related impacts on GAAP net income and diluted earnings per share are summarized in the tables below.


    Reconciliation of GAAP gross margin, gross margin percentage, net income and diluted EPS to adjusted gross margin, gross margin percentage, net income and diluted EPS:


    (United States dollars, in millions except per share data)

    For the quarter ended March 3, 2012
    Gross Margin(1) (before taxes) Gross Margin %(1)(before taxes) Net Income or (Loss) Diluted EPS
    As reported $ 1,401 33.4 % $ (125 ) (0.24 )
    Adjustments:
    Impairment of Goodwill(2) - - 346 0.66
    Inventory Provision(3) 267 6.4 % 197 0.38
    Adjusted $ 1,668 39.8 % $ 418 $ 0.80



    Note: Adjusted gross margin, adjusted net income and adjusted diluted earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted gross margin, adjusted gross margin percentage, adjusted net income and adjusted diluted earnings per share enables the Company and its shareholders to better assess RIM’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of RIM’s GAAP results.
    (1) During the fourth quarter of fiscal 2012, the Company reported GAAP gross margin of $1.4 billion or 33.4% of revenue. Excluding the impact of charges primarily related to inventory valuation of certain BlackBerry 7 products, the adjusted gross margin was $1.7 billion, or 39.8% of revenue.
    (2) Subsequent to the fourth quarter of fiscal 2012, the Company performed a goodwill impairment test and based on the results of that test, the Company recorded a non-cash pre-tax goodwill impairment charge of $355 million, $346 million after tax.
    (3) During the fourth quarter of fiscal 2012, the Company recorded a pre-tax provision of approximately $267 million, $197 million after tax, which was mostly non-cash, primarily related to its inventory valuation of certain BlackBerry 7 products.



    The total of cash, cash equivalents, short-term and long-term investments was $2.1 billion as of March 3, 2012, compared to $1.5 billion at the end of the previous quarter, an increase of approximately $610 million from the prior quarter. Cash flow from operations in Q4 was approximately $1.1 billion, up from $900 million in Q3. Uses of cash included intangible asset additions of approximately $260 million and capital expenditures of approximately $190 million.

    Fiscal 2012 Results


    Revenue for the fiscal year ended March 3, 2012 was $18.4 billion, down 7% from $19.9 billion in fiscal 2011. The Company’s GAAP net income for fiscal 2012 was $1.2 billion, or $2.22 per share diluted, compared with GAAP net income of $3.4 billion, or $6.34 per share diluted in fiscal 2011. Adjusted net income for fiscal 2012 was $2.2 billion, or $4.20 per share diluted. Adjusted net income and adjusted diluted earnings per share for fiscal 2012 exclude the adjustments described above as well as the impact of pre-tax charges of $54 million ($40 million after tax) to revenue related to the service interruption experienced in the third quarter, $485 million ($356 million after tax) for thePlayBook inventory provision taken in the third quarter and $125 million ($96 million after tax) for the Company’s cost optimization program that was implemented in the second quarter of fiscal 2012. These charges and their related impacts on GAAP net income and diluted earnings per share are summarized in the tables below.


    Reconciliation of GAAP revenue, gross margin, gross margin percentage, net income and diluted EPS to adjusted revenue, gross margin, gross margin percentage, net income, and diluted EPS:


    (United States dollars, in millions except per share data)

    For the year ended March 3, 2012
    Revenue (before taxes) Gross Margin(1)(before taxes) Gross Margin%(1)(before taxes) Net Income Diluted EPS
    As reported $ 18,435 $ 6,579 35.7 % $ 1,164 $ 2.22
    Adjustments:
    PlayBook Inventory Provision(2) - 485 2.6 % 356 0.68
    Cost Optimization Program(3) - 14 - 96 0.18
    Q3 Service Interruption(4) 54 54 0.3 % 40 0.08
    Impairment of Goodwill(5) - - - 346 0.66
    Inventory Provision(6) 19 267 1.4 % 197 0.38
    Adjusted $ 18,508 $ 7,399 40.0 % $ 2,199 $ 4.20



    Note: Adjusted revenue, adjusted gross margin, adjusted gross margin percentage, adjusted net income and adjusted diluted earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted revenue, adjusted gross margin, adjusted gross margin percentage, adjusted net income and adjusted diluted earnings per share enables the Company and its shareholders to better assess RIM’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of RIM’s GAAP results.
    (1) During fiscal 2012, the Company reported GAAP gross margin of $6.6 billion, or 35.7% of revenue. Excluding the impact of charges related to the PlayBook Inventory Provision, the Cost Optimization Program, the Q3 Service Interruption and the Inventory Provision, the adjusted gross margin was $7.4 billion, or 40.0% of revenue.
    (2) During fiscal 2012, the Company recorded a pre-tax provision of approximately $485 million, $356 million after tax, related to its inventory valuation of BlackBerry PlayBook tablets. The charge was predominantly non-cash.
    (3) Cost of sales, research and development, and selling, marketing and administration expenses in fiscal 2012 included approximately $11 million, $18 million, and $67 million, respectively, in after-tax charges related to the cost optimization program to streamline operations across the Company.
    (4) During fiscal 2012, the Company experienced a service interruption which resulted in the loss of service revenue and the payment of service credits totally approximately $54 million, approximately $40 million after tax, related to the interruption in the availability of the Company’s network.
    (5) Subsequent to fiscal 2012, the Company performed a goodwill impairment test and based on the results of that test, the Company recorded a non-cash pre-tax goodwill impairment charge of approximately $355 million, approximately $346 after tax.
    (6) In the fourth quarter of fiscal 2012, the Company recorded a pre-tax provision of approximately $267 million, $197 million after tax, which was mostly non-cash, primarily related to its inventory valuation of certain BlackBerry 7 products.



    Change to Guidance Practices and Outlook:
    The company expects continued pressure on revenue and earnings throughout fiscal 2013. Due to a desire to focus on long term value creation and the current business environment, RIM will no longer provide specific quantitative guidance. Some of the factors contributing to this include, ongoing weakness in the Company’s U.S. smartphone business, an increased focus on selling BlackBerry 7 smartphones to grow the subscriber base in advance of the BlackBerry 10 launch, increasing competitive pressure in the Company’s international markets and the introduction of certain new lower tier service pricing initiatives and a higher mix of sales coming from entry level products.

    Organizational and Board of Directors Update:


    Jim Balsillie, former Co-CEO of the Company, has resigned as a Director on the Company’s Board.


    “As I complete my retirement from RIM, I’m grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success,” said Jim Balsillie.


    “On behalf of the Board and everyone at RIM, I would like to thank Jim for his 20 years of service to RIM,” said Barb Stymiest, Chair of RIM’s Board of Directors. “His energy, drive and enthusiasm helped build one of the most successful technology companies of our time.”

    In addition, David Yach will be retiring from his role as CTO, Software after 13 years with the Company and after 4 years with the company and following an open dialogue on the future of global operations, Jim Rowan, COO, Global Operations, has decided to pursue other interests. The Company is currently undertaking a search to hire a single COO with responsibilities to run the Company’s operations.

    “RIM would like to thank David Yach and Jim Rowan for their years of service and many contributions to RIM,” said Thorsten Heins, President and CEO. “We wish them well in their future pursuits.”


    Conference Call and Webcast


    A conference call and live webcast will be held beginning at 5 pm ET, March 29, 2012, which can be accessed by dialing 1-800-814-4859 (North America), (+1)416-644-3414 (outside North America) or through your personal computer or BlackBerry® PlayBook™ tablet atwww.rim.com/investors/events/index.shtml. A replay of the conference call will also be available at approximately 7 pm ET by dialing (+1)416-640-1917 and entering passcode 4466496#. A replay of the webcast will be available on your personal computer or BlackBerry PlayBook tablet by clicking the link above. This replay will be available until midnight ET, April 12, 2012.
    Comments 15 Comments
    1. Delfim's Avatar
      Interesting reading. For the dimension of RIM, it's not yet a dismal report. But for the immediate short-term, and the trending prospects, both short and mid-term, it's a damn large dark cloud. The CEO's should be held accountable. I believe the once No. 2 Hockey hopeful has bailed the board. He should have walked the plank...As for his main buddy, let's see what he does. Probably grit his teeth and hold out for a great old-age pension.
      The other top ones, including that Ottawa University idiot should also get the boot.
      I wonder how many cronies are going to be left over.
      As for the new CEO, he better be drastic, and his statement
      "We believe BlackBerry cannot succeed if we try to be everybody's darling and all things to all people”
      is not the the strategy to follow. All he has to do is look at Apple and Android, and now Microsoft, to see that RIM has to be exactly that to all their present, and future customers.
    1. lak611's Avatar
      Quote Originally Posted by delfim View Post
      As for the new CEO, he better be drastic, and his statement
      "We believe BlackBerry cannot succeed if we try to be everybody's darling and all things to all people”
      is not the the strategy to follow. All he has to do is look at Apple and Android, and now Microsoft, to see that RIM has to be exactly that to all their present, and future customers.
      That is being interpreted as RIM leaving the consumer market and focusing on enterprise. The problem is, most enterprises are moving toward BYOD.

      http://finance.yahoo.com/news/blackb...212323407.html
    1. Delfim's Avatar
      Security maybe a concern by enterprise clients. But those are not the millions that will sustain RIM. Modified iOS and Android are guaranteeing the same level of security, or else the US Army, the NSA et al wouldn't switch over.
      This strategy is good for niche markets but only if you have the general consumer supporting you.
      It ain't gonna cut it.
    1. dushdavj's Avatar
      RIM have stated they are not getting out of the consumer market. Having said that they need to make something that consumers want, (BB10). With regards to BYOD I was under the impression that their enterprise setup works with this functionalit.
    1. lak611's Avatar
      Quote Originally Posted by dushdavj View Post
      RIM have stated they are not getting out of the consumer market. Having said that they need to make something that consumers want, (BB10). With regards to BYOD I was under the impression that their enterprise setup works with this functionalit.
      The issue I see is that consumers will not want BB10. I doubt if BB10 will attract developers to create apps that consumers want. If it is more of the same "get our app in the App Store, Google Play/Android Market or Windows Phone Marketplace" with no mention of BlackBerry AppWorld, the consumers will not buy the BB10 devices.
    1. RogerG's Avatar
      Say what you will about BGR and Geller, he had a pretty good article today about the State of RIM. While everything RIM is doing is well and good, just like everything else they've done lately, it's several years too late.
    1. Delfim's Avatar
      Hells bells Rog, I was the first one to state that when I reviewed the 9900.
      And that was back then. Some kudus for Pinstack are obligatory here...
    1. RogerG's Avatar
      That comment was really directed at all the BlackBerry diehards that are giving him grief on Twitter.

      I don't particularly care for the guy, but I'll tell you what......the Cult of Apple has turned into the Cult of BlackBerry these days.
    1. srl7741's Avatar
      Don't worry by years end they will go away and be good friends with Palm fans and form a new group, yet to be named
    1. dushdavj's Avatar
      The article is a reasonable take on the current state of affairs in RIM, however there are a few points I do not agree with. I don't think RIM is any more dead than Apple was a few years back. I also do not agree with the statement that QNX is a poor OS, having used it on the PlayBook, I like it, would it work on a PC, no, but it works really wel on the Playbook, (I prefer it to Android, IOS and Windows), will it be as good on a phone I don't know it remains to be seen what design they come out with. Certainly whatever they do it has to be fast, have a large screen, and a good battery life. Will it be an Apple/Android killer? Of course not, these two are well estabilished now and the only thing that will kill them will be the same thing that hurt RIM, themselves. If Apple keeps coming out with minor upgrades people will get upset and try something else (probably Android), similarly if there are enough security issues on any of the systems that actually affect people rather than just being reported in the tech press, it may hurt. No-one can forsee the future, so will RIM survive, difficult to say, (we all may be gone at the end of 2012 ), I think they will not dissapear this year, or even next. Will there be a merger? Again the question is more where are there compatible companies that would consider it? Of course they could be bought to close down, get rid of the competition, and just keep the Patents. Whatever happens peoples lives will be affected particulalrly those that work for the company, and so for me I hope they survive I don't like seeing people losing jobs.

      Disclaimer: Whilst I use BB phones and the Playbook I do not consider myself to be a fanboy, the BB phone does what I need, I don't play games and normally use the Playbook for the web interface. I do prefer the Playbook, form and operating system, camera (things that I use it for) to the IPad2, haven't had the opportunity to compare the new IPad so cannot say what my reaction is there.
    1. lak611's Avatar
      I've used BlackBerry for several years now, but I am not going to continue with the platform. I have no interest in games. However, almost all apps I want are not available for BlackBerry, and these are not only apps like Netflix and Skype. For instance, Home Depot has an app for all platforms except BlackBerry.

      Daily battery pulls, a painfully slow browser, and the ever present hourglass are old too.
    1. Mark Stone's Avatar
      Quote Originally Posted by lak611 View Post
      I've used BlackBerry for several years now, but I am not going to continue with the platform. I have no interest in games. However, almost all apps I want are not available for BlackBerry, and these are not only apps like Netflix and Skype. For instance, Home Depot has an app for all platforms except BlackBerry.

      Daily battery pulls, a painfully slow browser, and the ever present hourglass are old too.
      I'm going to continue with BB because my life is organized through use of the PIM apps that are native to the os. I'm spoiled by the excellent calendar, secure password keeper, nice note taking app and the excellent qwerty for messaging. I run a Bold 9780 without a data plan on T-Mobile. Occasionally I turn on the Wi Fi and look at YouTube or Facebook, but mostly my machine is an electronic organizer.

      The bad thing for RIM is that people like me that use them this way are very, very rare - most smartphones are consumer goods now, not business devices. But if RIM goes out of business, and my Boldie wears out, I'll go to Ebay and buy an older Berry because of the PIM tools. I've tried both iOS and Android and they don't measure up in that specific area, although Windows looks promising.

      If I want to keep posting articles on the Front Page here, however, it might be a wise decision for me to get on the bandwagon and get an Android so I know what the heck I'm talking about when I post . . . Hahahahaha
    1. lak611's Avatar
      Quote Originally Posted by Mark Stone View Post
      I'm going to continue with BB because my life is organized through use of the PIM apps that are native to the os. I'm spoiled by the excellent calendar, secure password keeper, nice note taking app and the excellent qwerty for messaging. I run a Bold 9780 without a data plan on T-Mobile. Occasionally I turn on the Wi Fi and look at YouTube or Facebook, but mostly my machine is an electronic organizer.

      The bad thing for RIM is that people like me that use them this way are very, very rare - most smartphones are consumer goods now, not business devices. But if RIM goes out of business, and my Boldie wears out, I'll go to Ebay and buy an older Berry because of the PIM tools. I've tried both iOS and Android and they don't measure up in that specific area, although Windows looks promising.

      If I want to keep posting articles on the Front Page here, however, it might be a wise decision for me to get on the bandwagon and get an Android so I know what the heck I'm talking about when I post . . . Hahahahaha
      Mark, it does make sense for you to use BlackBerry, given the way you use your device. I do sync my calendar/contacts with Outlool. However, I've always shrunk out tasks, password keeper, and notepad. I've never used those apps, and the devices lacked memory to run the apps I use with those installed.

      That's another thing I won't miss: needing to shrink the OS due to lack of app space.
    1. Delfim's Avatar
      ^^^ that's high cholesterol. You shouldn't b(g)loat so much
    1. dushdavj's Avatar
      I hope you don't have the same problem with the unhappy face I have had on several Ipods due to battery problems after 2years. Also Roger you don't have 64Gb of Memory its 64Gb of storage, RIM needs to use memory properly, if they don't do this they are toast. Remember how long it took Microsoft to use more than the first 500Kb of memory controlled by DOS.

      Things change. I haven't written RIM off, no more than I think the PC is dead or that we will stop needing oil in the next 20 years
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