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2001 Finance Info

Trend Micro Announces U.S. GAAP Financial Information for the First Half of 2001

Tokyo, Japan – October 22, 2001 – Trend Micro Inc. (Nasdaq: TMIC, TSE: 4704), a worldwide leader in network antivirus and Internet content security solutions, today announced its unaudited U.S. GAAP financial information for the first half of 2001. Financial Highlights for the first half of FY 2001 January 1, 2001 through June 30, 2001
(1) Consolidated Results of Operations (Unaudited except FY 00 (annual))


Sales

Growth rate

Operating
income

Growth rate

Net income before tax

Growth rate

Millions of yen

%

Millions of yen

%

Millions of yen

%

The first half of FY 01

12,939

38.7

1,007

(62.4)

1,224

(67.3)

The first half of FY 00

9,331

62.7

2,678

56.7

3,740

111.5

FY 00 (annual)

20,070

 

5,527


6,892


 

Net Income

Growth rate

Net income
per share

Net income
per share (diluted)

 

Millions of yen

%

Yen

Yen

The first half of FY01

554

(74.8)

4.22

4.14

The first half of FY00

2,194

162.7

16.88

16.40

FY 00 (annual)

3,675

 

28.18

27.53

(Note)

1. Equity in loss of affiliated companies:- 105 million yen (- 24 million yen in the first half of FY 2000, - 88 million yen in FY 2000)
2. The average number of issued and outstanding shares (consolidated):131,339,944 shares (130,011,158 shares for the first half of FY 2000, 130,388,962 shares for FY 2000)
3. Changes in accounting principles:Not applicable

4. The percentage of sales, operating income, net income before tax and net income are in comparison to the first half of the prior fiscal year.


(2) Consolidated Financial Position (Unaudited except December 31, 2000)

 

Total assets

Shareholders’ equity

Shareholders’ equity ratio

Shareholders’ equity
per share

As of:

Millions of yen

Millions of yen

 

Yen

June 30, 2001

52,993

26,891

50.7

204.21

June 30, 2000

38,519

20,999

54.5

161.10

December 31, 2000

44,574

24,344

54.6

185.66

(Note)

Number of issued and outstanding shares (consolidated):131,681,887 shares as of June 30, 2001, the end of the first half of FY 2001 (130,345,338 shares as of the end of the first half of FY 2000, 131,120,842 shares as of the end of the FY 2000)

(3) Consolidated Cash Flow Position (Unaudited except December 31, 2000)


Operating Cash Flow

Investing Cash Flow

Financing Cash Flow

Ending balance of Cash and Cash equivalents

As of:

Millions of yen

Millions of yen

Millions of yen

Millions of yen

June 30, 2001

4,191

(1,364)

6,963

34,553

June 30, 2000

1,594

(1,772)

5,430

20,902

December 31, 2000

6,086

(4,141)

6,496

24,436


(4) Basis of consolidation and application of equity method: The number of consolidated subsidiaries …………… 18 The number of unconsolidated subsidiaries …………… - The number of affiliated companies …………… 4(5) Change in the basis of consolidation and application of equity method: The number of additional consolidated subsidiaries…..… 2 The number of excluded consolidated subsidiaries…..… - The number of additional consolidated affiliated companies… 1 The number of excluded consolidated affiliated companies… -

Previously, on August 3, 2001, Trend Micro announced its Japanese GAAP financial information for the same period. Significant differences between Japanese GAAP and U.S. GAAP applicable to Trend Micro are summarized below. Goodwill write-off (2,000 million yen), which is recognized as other expenses under Japanese GAAP, is recognized as operating expenses under U.S. GAAP. From the fiscal year ending December 31, 2001, Trend Micro and Trend Micro Incorporated (Taiwan) have adopted the deferred revenue accounting for their Post-contract Customer Support service for its Japanese GAAP financial reporting purposes. The cumulative effect of adopting the deferred revenue accounting of 3,009 million yen is recorded as other expenses under Japanese GAAP. For its U.S. GAAP reporting purposes, Trend Micro and Trend Micro Incorporated (Taiwan) have historically adopted the deferred revenue accounting for their Post-contract Customer Support service on a consistent basis.

TREND MICRO INCORPORATED
AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Except December 31, 2000, all balances unaudited)

ASSETS


Thousands of yen

Thousands of U.S. dollars

June 30, 2000

December 31, 2000

June 30, 2001

June 30, 2001

Current assets:

Cash and cash equivalents¥20,901,860¥24,435,503¥34,553,234$276,426
Time deposits--65,511524
Marketable securities3,262,8621,893,4752,505,71720,046

Notes and accounts receivable, trade - less allowance for doubtful accounts and sales return of \419,776, \646,566 and \608,682 ($4,869)

6,812,2718,133,7007,058,79956,471
Inventories101,778318,188206,9461,656
Deferred income taxes940,8662,687,9132,798,03122,384
Prepaid expenses and other current assets1,749,301607,142994,1087,952
33,768,93838,075,92148,182,346385,459


Investments and other assets:



Securities investments980,8011,335,8491,256,50110,052
Investment in and advances to affiliated Companies246,628182,473109,623877
Goodwill and other intangible assets1,586,6092,740,827979,5287,836
Deferred income taxes398,019446,004150,4471,204
Other539,415570,742795,7216,366
3,751,4725,275,8953,291,82026,335


Property and equipment:

Office furniture and equipment1,308,8531,536,4441,921,11215,369
Other properties357,362443,102597,0894,776
1,666,2151,979,5462,518,20120,145
Less: Accumulated depreciation(667,128)(756,898)(999,550)(7,996)
999,0871,222,6481,518,65112,149




¥38,519,497¥44,574,464¥52,992,817$423,943

TREND MICRO INCORPORATED
AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Except December 31, 2000, all balances unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands of yen

Thousands of U.S. dollars

June 30, 2000

December 31, 2000

June 30, 2001

June 30, 2001

Current liabilities:
Current portion of long-term debt-¥ 57,200¥ 57,200$458
Notes payable, trade¥148,182132,49981,140649
Accounts payable, trade472,072796,782627,5475,020
Accounts payable, other591,154517,247637,7005,102
Withholding income taxes145,999120,994172,6481,381
Accrued expenses476,950615,850981,6437,853
Accrued income and other taxes946,8552,014,589606,6824,853
Deferred revenue2,898,8875,043,4256,311,19750,490
Other349,417415,372273,2782,187
6,029,5169,713,9589,749,03577,993


Long-term liabilities:

Long-term debt10,865,7609,799,90015,471,300123,770
Deferred revenue330,544548,225655,2915,242
Accrued pension and severance costs143,590168,032226,3151,811
11,339,89410,516,15716,352,906130,823


Minority interest in consolidated subsidiary151,468

-

-

-

 
Shareholders’ equity: 
Common stock, ¥50 par value - 
Authorized – 250,000,000 shares  
Issued and outstanding  
- June 30, 2000 130,345,338 shares5,620,192 
- December 31, 2000 131,120,842 shares 6,183,266
- June 30, 2001 131,681,887 shares  6,799,37454,395
Additional paid-in capital10,101,92311,631,59112,313,16098,505
Legal reserve149,991149,991149,9911,200
Deferred compensation related to stock options(50,764)---
Retained earnings5,276,7226,745,7697,279,92058,239
Accumulated other comprehensive income

Net unrealized gain on debt and equity securities503,255(168,277)118,721950
Cumulative translation adjustments(580,279)(169,616)240,7011,926
(77,024)(337,893)359,4222,876
Treasury stock, at cost(22,421)(28,375)(10,991)(88)
20,998,61924,344,34926,890,876215,127
Commitments and contingent liabilities----
¥38,519,497¥44,574,464¥52,992,817$423,943

TREND MICRO INCORPORATED
AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

( Unaudited )

Thousands of yen

Thousands of U.S. dollars

For the six months
ended June 30,

For the six months ended
June 30,

2000

2001

2001

Net sales¥9,330,979¥12,939,355$103,515
Cost of sales603,879732,2295,858
Gross profit8,727,10012,207,12697,657

Operating expenses:
Selling1,068,1553,224,43025,795
Research and development850,8581,481,96211,856
General and administrative4,034,0584,240,35733,923
Goodwill amortization95,797--
Goodwill write-off-2,253,55918,028
6,048,86811,200,30889,602

Operating income2,678,2321,006,8188,055

Other income (expenses):
Interest income76,561202,2671,618
Interest expense(85,521)(135,172)(1,081)
Gain on sales of marketable securities65,377--
Foreign exchange gain, net31,191256,8302,055
Other income (expense), net974,227(107,200)(859)
1,061,835216,7251,733

Income before income taxes, minority interest and equity in loss of affiliated companies3,740,0671,223,5439,788
Income taxes (benefit):
Current1,790,174491,6583,933
Deferred(340,689)73,174585
1,449,485564,8324,518
Income before minority interest and equity in loss of affiliated companies2,290,582658,7115,270
Minority interest in income of a consolidated subsidiary72,645--
Income from consolidated companies2,217,937658,7115,270
Equity in losses of affiliated companies23,517104,850839

Net income¥2,194,420¥553,861$4,431


\

\

U.S. dollars

Per share data:
Net income - basic¥16.88¥4.22$0.03
- diluted16.404.140.03
Cash dividends---

TREND MICRO INCORPORATED
AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Thousands of yen

Thousands of U.S. dollars

For the six months
ended June 30,

For the six months ended
June 30,

2000

2001

2001

Cash flows from operating activities:
Net income¥2,194,420¥553,861$4,431
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred compensation related to stock options46,114

-

-

Depreciation and amortization466,2432,728,58421,829
Pension and severance costs, less payments30,83356,660453
Loss on disposal of fixed assets2,739

-

-

Deferred income taxes(340,688)73,174585
Gain on sales of marketable securities(65,377)

-

-

Minority interest in income of a consolidated subsidiary72,645

-

-

Changes in assets and liabilities:
Increase in deferred revenue800,1071,197,4199,579
(Increase) decrease in notes and accounts receivable, trade, net of allowances(915,342)1,323,96710,592
Decrease (increase) in inventories(26,987)113,719910
(Decrease) in notes and accounts payable, trade(187,070)(261,766)(2,094)
(Decrease) increase in accrued corporate taxes and other76,529(1,413,131)(11,305)
Increase in other current assets(726,786)(103,212)(826)
Increase (decrease) in other current liabilities(6,101)40,311322
Other172,974(118,669)(949)
Net cash provided by operating activities1,594,2534,190,91733,527

Cash flows from investing activities:
Payments for purchases of fixed assets(412,227)(1,228,759)(9,830)
Proceeds from sales of marketable securities150,8142,611,42620,891
Payments for purchases of marketable securities(2,736)(2,648,926)(21,191)
Acquisitions of businesses, net of cash acquired(1,308,248)--
Increase in investments in affiliated companies(200,000)(32,000)(256)
Payments for time deposits

-

(65,511)(524)
Net cash used in investing activities(1,772,397)(1,363,770)(10,910)

Cash flows from financing activities:
Issuance of common stock pursuant to exercise of stock options359,273870,7976,966
Tax benefit from exercise of non-qualified stock options621,555411,3013,290
Proceeds from long-term debt5,000,0006,500,00052,000
Repayment of long-term debt(325,056)(828,600)(6,629)
Decrease in short-term borrowings(198,000)--
Other(27,555)9,52577
Net cash provided by financing activities5,430,2176,963,02355,704
Effect of exchange rate changes on cash and cash equivalents906327,5612,621
Net increase in cash and cash equivalents5,252,97910,117,73180,942
Cash and cash equivalents at beginning of period15,648,88124,435,503195,484
Cash and cash equivalents at end of period¥20,901,860¥34,553,234$276,426

Notes:

  1. Balance sheet and income statement of fiscal year 2000 and the related numbers are retroactively restated by the effect of stock split on March 31, 2001(1:2 stock split).
  2. US dollar amounts in the financial statements are calculated by the approximate exchange rate as of June 29, 2001 (\125.00=U.S.$1) and are for reference only.

About Trend Micro:

Trend Micro Incorporated (TSE: 4704), a global cloud security leader, creates a world safe for exchanging digital information with its Internet content security and threat management solutions for businesses and consumers. A pioneer in server security with over 20 years' experience, we deliver top-ranked client, server and cloud-based security that fits our customers' and partners' needs, stops new threats faster, and protects data in physical, virtualized and cloud environments. Powered by the Trend Micro™ Smart Protection Network™ cloud security infrastructure, our industry-leading cloud-computing security technology, products and services stop threats where they emerge, on the Internet, and are supported by 1,000+ threat intelligence experts around the globe.

Additional information about Trend Micro Incorporated and the products and services are available at Trend Micro.com This Trend Micro news release and other announcements are available at http://trendmicro.mediaroom.com/ and as part of an RSS feed at www.trendmicro.com/rss Or follow our news on Twitter at @TrendMicro.


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