6-K 1 form6-k.htm form6-k.htm
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934


For the month of,
September
  
 2013
Commission File Number  
000-29898
    
 
BlackBerry Limited
(Translation of registrant’s name into English)
 
295 Phillip Street, Waterloo, Ontario, Canada N2L 3W8
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F:

 
Form 20-F
  
Form 40-F
X
  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):          
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):           

 
 
 

DOCUMENTS INCLUDED AS PART OF THIS REPORT


Document
  
   
1
BLACKBERRY REPORTS SECOND QUARTER FISCAL 2014 RESULTS



 
 
 
 

DOCUMENT 1
 
 
 
 
 
 
 
NEWS RELEASE
 
September 27, 2013
 
FOR IMMEDIATE RELEASE
 
BLACKBERRY REPORTS SECOND QUARTER FISCAL 2014 RESULTS

Waterloo, ON – BlackBerry (Nasdaq: BBRY; TSX: BB), a world leader in the mobile communications market, today reported second quarter results for the three months ended August 31, 2013 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Q2 Highlights:

 
·
Revenue for the second quarter of approximately $1.6 billion; company recognizes revenue on approximately 3.7 million smartphones in the second quarter
 
·
GAAP loss from continuing operations of $965 million, or $1.84 per share diluted; includes a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $934 million and pre-tax restructuring charges of approximately $72 million
 
·
Adjusted loss from continuing operations of $248 million, or $0.47 per share diluted; adjusted gross margin of $570 million, or 36%
 
·
Company sees increasing penetration of BlackBerry Enterprise Service 10 (BES 10) with more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013
 
·
Cash and investments balance of $2.6 billion

Q2 Results

Revenue for the second quarter of fiscal 2014 was approximately $1.6 billion, down 49% from $3.1 billion in the previous quarter and down 45% from $2.9 billion in the same quarter of fiscal 2013. The revenue breakdown for the quarter was approximately 49% for hardware, 46% for service and 5% for software and other revenue. During the second quarter the company recognized hardware revenue on approximately 3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the second quarter of fiscal 2014 will not be recognized until those devices are sold through to end customers. During the quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company’s inventory in the channel.

The GAAP loss from continuing operations for the quarter was $965 million, or $1.84 per share diluted, including a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $934 million (the “Z10 Inventory Charge”), and pre-tax restructuring charges of approximately $72 million related to the Cost Optimization and Resource Efficiency (“CORE”) program.
 
 
 
 
 
This is compared with a GAAP loss from continuing operations of $84 million, or $0.16 per share diluted in the prior quarter and GAAP loss from continuing operations of $229 million, or $0.44 per share diluted, in the same quarter last year.

The adjusted loss from continuing operations for the second quarter was $248 million, or $0.47 per share diluted. The adjusted loss from continuing operations and adjusted diluted loss per share exclude the impact of the Z10 Inventory Charge of approximately $934 million ($666 million after tax) and pre-tax restructuring charges of approximately $72 million ($51 million after tax) related to the CORE program incurred in the second quarter of fiscal 2014. These impacts on GAAP loss from continuing operations and diluted loss per share from continuing operations are summarized in the table below.

The total of cash, cash equivalents, short-term and long-term investments was $2.6 billion as of August 31, 2013, compared to $3.1 billion at the end of the previous quarter. Cash flow used in operations in the second quarter was approximately $136 million. Uses of cash included intangible asset additions of approximately $268 million and capital expenditures of approximately $112 million.
 
“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” said Thorsten Heins, President and CEO of BlackBerry. “While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10, where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013. We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company.”
 
 
 
 
 
Reconciliation of GAAP gross margin, gross margin percentage, loss from continuing operations before income taxes, loss from continuing operations and diluted loss per share from continuing operations to adjusted gross margin, adjusted gross margin percentage, adjusted loss from continuing operations before income taxes, adjusted loss from continuing operations and adjusted diluted loss per share from continuing operations:
(United States dollars, in millions except per share data)

   
Gross Margin(1) (before taxes)
    
Gross Margin %(1) (before taxes)
    
 
Loss from continuing operations before income taxes
    
Loss from Continuing Operations
    
Diluted loss per share from continuing operations
  
As reported
   $ (374 )     (24 %)   $ (1,438 )   $ (965 )   $ (1.84 )
Adjustments:
                                        
CORE charges (2)
     10       1 %     72       51       0.10  
Z10 inventory provision (3)
     934       59 %     934       666       1.27  
Adjusted
   $ 570       36 %   $ (432 )   $ (248 )   $ (0.47 )
 
____________

Note: Adjusted gross margin, adjusted gross margin percentage, adjusted loss from continuing operations before tax, adjusted loss from continuing operations and adjusted diluted loss per share from continuing operations 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 these non-GAAP measures enables the Company and its shareholders to better assess the Company’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 the Company’s GAAP results.

 
(1)
During the second quarter of fiscal 2014, the Company reported a GAAP gross margin of ($374) million or (24%) of revenue. Excluding the impact the Z10 Inventory Charge and CORE charges included in cost of sales, the adjusted gross margin was $570 million, or 36%.
 
(2)
As part of the Company’s ongoing effort to streamline its operations and increase efficiency, the Company commenced the CORE program in March 2012. During the second quarter of fiscal 2014, the Company incurred approximately $72 million in total pre-tax charges related to the CORE program. Substantially all of the pre-tax charges are related to one-time employee termination benefits and facilities costs. During the second quarter of fiscal 2014, charges of approximately $10 million were included in cost of sales, charges of approximately $8 million were included in research and development and charges of approximately $54 million were included in selling, marketing, and administration expenses.
 
(3)
During the second quarter of fiscal 2014, the Company recorded a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $934 million, $666 million after tax, which is primarily attributable to BlackBerry Z10 devices.
 
 
 
 
 
Supplementary Geographic Revenue Breakdown

 
BlackBerry Limited
(United States dollars, in millions)
Revenue by Region
 
    For the quarter ended  
    August 31, 2013     June 1, 2013     March 2, 2013     December 1, 2012     September 1, 2012  
North America   $ 414     26.3 %   $ 761     24.8 %   $ 587     21.9 %   $ 647     23.7 %   $ 868     30.3 %
Europe, Middle East and Africa     686     43.6 %     1,343     43.7 %     1,227     45.8 %     1,160     42.5 %     1,087     38.0 %
Latin America     196     12.5 %     449     14.6 %     479     17.9 %     535     19.6 %     520     18.2 %
Asia Pacific     277     17.6 %     518     16.9 %     385     14.4 %     385     14.1 %     386     13.5 %
Total   $ 1,573     100.0 %   $ 3,071     100.0 %   $ 2,678     100.0 %   $ 2,727     100.0 %   $ 2,861     100.0 %
 
 
About BlackBerry
 
A global leader in wireless innovation, BlackBerry® revolutionized the mobile industry when it was introduced in 1999. Today, BlackBerry aims to inspire the success of our millions of customers around the world by continuously pushing the boundaries of mobile experiences. Founded in 1984 and based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Asia Pacific and Latin America. BlackBerry is listed on the NASDAQ Stock Market (NASDAQ: BBRY) and the Toronto Stock Exchange (TSX: BB). For more information, visit www.blackberry.com.

Investor Contact:
BlackBerry Investor Relations
(519) 888-7465
investor_relations@blackberry.com
###

This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws. The terms and phrases “expects”, “believe”, “focused”, “getting”, “opportunities”, “we are seeing”, “continuing”, “drive”, “improve”, “should”, “will”, “increasing”, “anticipated”, and similar terms and phrases are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances. Many factors could cause BlackBerry’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including those described in the “Risk Factors” section of BlackBerry’s  Annual Information Form, which is included in its Annual Report on Form 40-F and the “Cautionary Note Regarding Forward-Looking Statements” section of BlackBerry’s  MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on BlackBerry’s forward-looking statements. BlackBerry 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, except as required by law.
 
 
 
 
 
BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions except share and per share amounts) (unaudited)
 
Consolidated Statements of Operations
 
 
For the three months ended
    
For the six months ended
  
 
August 31,
2013
    
June 1,
2013
    
September 1,
2012
    
August 31,
2013
    
September 1,
2012
  
                             
Revenue
 $ 1,573     $ 3,071     $ 2,861     $ 4,644     $ 5,669  
Cost of sales
   1,947       2,029       2,117       3,976       4,139  
Gross margin
   (374 )     1,042       744       668       1,530  
                                       
Gross margin %
   (23.8 %)     33.9 %     26.0 %     14.4 %     27.0 %
                                       
Operating expenses
                                      
Research and development
   360       358       366       718       733  
Selling, marketing and administration
   527       673       556       1,200       1,103  
Amortization
   171       180       180       351       352  
Impairment of goodwill
   -       -       -       -       335  
    1,058       1,211       1,102       2,269       2,523  
                                       
Operating loss
   (1,432 )     (169 )     (358 )     (1,601 )     (993 )
                                       
Investment income (loss), net
   (6 )     5       -       (1 )     3  
                                       
Loss from continuing operations before income taxes
   (1,438 )     (164 )     (358 )     (1,602 )     (990 )
                                       
Recovery of income taxes
   (473 )     (80 )     (129 )     (553 )     (251 )
                                       
Loss from continuing operations
   (965 )     (84 )     (229 )   $ (1,049 )   $ (739 )
                                       
Loss from discontinued operations, net of tax
   -       -       (6 )     -     $ (14 )
                                       
Net loss
 $ (965 )   $ (84 )   $ (235 )   $ (1,049 )   $ (753 )
                                       
Loss per share
                                      
Basic and diluted loss per share from continuing operations
 $ (1.84 )   $ (0.16 )   $ (0.44 )   $ (2.00 )   $ (1.41 )
Basic and diluted loss per share from discontinued operations
   -       -       (0.01 )     -       (0.03 )
Total basic and diluted loss per share
 $ (1.84 )   $ (0.16 )   $ (0.45 )   $ (2.00 )   $ (1.44 )
                                       
Weighted-average number of common shares outstanding (000’s)
                                      
Basic
   524,481       524,160       524,160       524,320       524,160  
Diluted
   524,481       524,160       524,160       524,320       524,160  
                                       
Total common shares outstanding (000's)
   524,639       524,160       524,160       524,639       524,160  

 
 
 
 
BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions except share and per share amounts) (unaudited)
 
Consolidated Balance Sheets

As at
  
August 31, 2013
    
March 2, 2013
  
             
Assets
            
Current
            
Cash and cash equivalents
   $ 1,181     $ 1,549  
Short-term investments
     1,163       1,105  
Accounts receivable, net
     1,743       2,353  
Other receivables
     223       272  
Inventories
     941       603  
Income taxes receivable
     462       597  
Other current assets
     696       469  
Deferred income tax asset
     128       139  
Assets held for sale
     122       145  
      6,659       7,232  
              -  
Long-term investments
     225       221  
Property, plant and equipment, net
     2,119       2,264  
Intangible assets, net
     3,505       3,448  
    $ 12,508     $ 13,165  
                 
Liabilities
                
Current
                
Accounts payable
   $ 1,130     $ 1,064  
Accrued liabilities
     1,909       1,842  
Deferred revenue
     834       542  
      3,873       3,448  
              -  
Deferred income tax liability
     202       245  
Income taxes payable
     9       12  
      4,084       3,705  
Shareholders’ Equity
                
Capital stock and additional paid-in capital
     2,451       2,431  
Treasury stock
     (234 )     (234 )
Retained earnings
     6,218       7,267  
Accumulated other comprehensive income
     (11 )     (4 )
      8,424       9,460  
    $ 12,508     $ 13,165  
 
 
 
 
 
BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions except share and per share amounts) (unaudited)
 
Consolidated Statements of Cash Flows
 
   
August 31, 2013
    
September 1, 2012
  
             
Cash flows from operating activities
            
Loss from continuing operations
   $ (1,049 )   $ (739 )
Loss from discontinued operations
     -       (14 )
Net loss
     (1,049 )     (753 )
                 
Adjustments to reconcile net loss to net cash provided by operating activities:
                
Amortization
     756       1,001  
Deferred income taxes
     (32 )     10  
Income taxes payable
     (3 )     6  
Stock-based compensation
     38       42  
Impairment of goodwill
     -       335  
Other
     39       11  
Net changes in working capital items
     737       483  
Net cash provided by operating activities
     486       1,135  
                 
Cash flows from investing activities
                
Acquisition of long-term investments
     (220 )     (161 )
Proceeds on sale or maturity of long-term investments
     180       85  
Acquisition of property, plant and equipment
     (195 )     (240 )
Acquisition of intangible assets
     (603 )     (537 )
Business acquisitions, net of cash acquired
     (7 )     (105 )
Acquisition of short-term investments
     (917 )     (397 )
Proceeds on sale or maturity of short-term investments
     930       204  
Net cash used in investing activities
     (832 )     (1,151 )
                 
Cash flows from financing activities
                
Tax deficiencies related to stock-based compensation
     (2 )     (5 )
Purchase of treasury stock
     (16 )     -  
Net cash used in financing activities
     (18 )     (5 )
                 
Effect of foreign exchange gain (loss) on cash and cash equivalents
     (4 )     5  
                 
Net decrease in cash and cash equivalents for the period
     (368 )     (16 )
Cash and cash equivalents, beginning of period
     1,549       1,527  
Cash and cash equivalents, end of period
   $ 1,181     $ 1,511  
                 
As at
  
August 31, 2013
    
June 1, 2013
  
                 
Cash and cash equivalents
   $ 1,181     $ 1,591  
Short-term investments
     1,163       1,233  
Long-term investments
     225       247  
    $ 2,569     $ 3,071  
 
 
 
 
 

 SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
BlackBerry Limited
 
(Registrant)
   
Date:
  
September 27, 2013
  
By:  
/s/ Brian Bidulka
 
Name:  
Brian Bidulka
 
Title:
Chief Financial Officer