Sales grow by 42% and operating income by 16% in Q3 2002
Tokyo, Japan – October 22, 2002 - Trend Micro Inc (TSE: 4704; Nasdaq: TMIC), a leader in network antivirus and Internet content security software and services, today reported results in Japanese GAAP for the third quarter 2002, ended September 30, 2002. Trend Micro posted consolidated net sales of 10.7 billion yen, (or US$ 85 million¹) and operating income of 3.0 billion yen (or US$ 24 million). The figures reflect gains of 42% in sales and 16% in operating income compared with the same period a year ago.
All regions worldwide experienced growth compared to the same quarter in 2001; sales in Japan increased 63% year over year. The Asia Pacific and European regions also experienced a strong third quarter, with 64% and 42% growth year over year, respectively.
"We continue to deliver value to our customers and our investors, despite the continued weakness in the economy worldwide," said Steve Chang, Chairman and CEO of Trend Micro. "This quarter we experienced growth in all regions and showed strength in both our enterprise and consumer products. Additionally, we introduced an industry-first Virus Response Service Level Agreement (SLA), demonstrating our dedication to service excellence for our customers and further driving the adoption of our recently announced Enterprise Protection Strategy. We believe that as more customers adopt this strategy, we will continue to see growth in our enterprise offerings."
All major product lines grew as compared to the same quarter in 2001. Enterprise product revenue grew by 30% year over year, representing 82% of net sales in Q32. Consumer product revenue grew 154% year over year.
Consolidated net sales for the fourth quarter ending December are expected to be between 11.5 and 12.0 billion yen (or US$ 92 to 96 million). Ordinary income is expected to be between 3.4 and 3.6 billion yen (or US$ 27.2 to 28.8).
Third Quarter Highlights
$1 US = 125 Japanese Yen
Management accounting numbers. Financial filings may be slightly different
Notice Regarding Forward Looking Statements
The statements included in this release contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our expectations about our earnings for the fourth quarter and for the year ending December 31, 2002. Many important factors could cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include:
We assume no obligation to update any forward-looking statements. For more details regarding risk factors relating to our future performance, please refer to our filings with the SEC including our annual report on Form 20-F which was filed on July 1,2002.
The following tables show key financial information for the three months and for the nine months ended September 30, 2002 as announced by Trend Micro in Japan.
*Figures for the third quarter of 2002 and 2001 are in accordance with Japanese GAAP and not audited.
|Current third quarter||Growth Rate||Year-to-date results||Growth Rate||Previous third quarter||Year-to-date results|
|From July 1, 2002||From January 1, 2002||From July 1, 2001||From January 1, 2001|
|To September 30, 2002||To September 30, 2002||To September 30, 2001||To September 30, 2001|
|Millions of yen||%||Millions of yen||%||Millions of yen||Millions of yen|
|Cost of sales||520||40.5||1,715||55.6||370||1,102|
|Selling, general and administrative expenses||7,105||57.5||20,060||45.2||4,512||13,820|
|Income before taxes||3,233||41.3||9,493||5,723.9||2,288||163|
|Corporate,inhabitant and enterprise tax||1,434||-||4,177||5,723.9||-|
|Net income <Note>||1,798||-||5,316||-|
<Note> Trend Micro has begun reporting its net income in this third quarter of 2002. Figures for Trend Micro's net income for the third quarter of 2001 is not available
(2) Geographic segment information
Sales to third parties
2002 2001 Current third quarter Year-to-date results Previous third quarter Year-to-date results From July 1, 2002 From January 1, 2002 From July 1, 2001 From January 1, 2001 To September 30, 2002 To September 30, 2002 To September 30, 2001 To September 30, 2001 Millions of yen Millions of yen Millions of yen Millions of yen Japan 4,769 13,340 2,921 7,408 North America 2,314 6,982 2,197 6,215 Europe 2,159 6,841 1,516 4,312 Asia Pacific 1,107 3,091 676 1,893 Others 360 963 236 657 Total 10,712 31,219 7,548 20,488
<Note>1. Classification of countries and regions is based on geographical proximity.2. Classification of countries and regions into each geographic segment.
North America : U.S.A.
Europe : Italy, Germany, France, UK
Asia Pacific : Taiwan, Korea, Australia, Hong Kong, Malaysia, New Zealand, China
Others : Brazil, Mexico
(3) Basis of consolidation
The number of consolidated subsidiaries 15 (15 in overseas) The number of unconsolidated subsidiaries -
(4) Increase (Decrease) of major assets and liabilities
As of September 30, 2002
As of December 31, 2001 (Assets) Millions of yen Millions of yen Millions of yen Cash and bank deposits 44,715 3,861 40,853 Notes and accounts receivable, trade 10,037 -2,243 12,280 Investments in securities 2,808 279 2,529 (Liabilities)
(Total of short and long term)
12,997 2,738 10,259 Bonds(Total of short and long term) 11,500 -3,000 14,500 (Shareholders' equity) Treasury stock/td> -1,524 -1,502 -22
<Note> In order for the warrants to be granted or transferred to the directors and certain employees of the Company and to the directors and certain employees of an affiliated company, the Company issued unsecured bonds with detachable warrants. Under section 341-8-4 of the Japanese Commercial Code, the redemption and retirement of these bonds are restricted when the total amount of the bonds is less than the total amount of the issue price of the stocks from unexecuted warrants. To reduce interest costs, the Company repurchased some of the issued bonds after warrants were detached. Based on the above reason, the Company intends to hold the treasury bonds until they can be retired legally which is substantially the same as redemption. Thus, bonds and treasury bonds (10,000 millions of yen as of September 30, 2002 and 6,800 millions as of December 31,2001 respectively) are disclosed in net amount in the balance sheet.
(1) Projected earnings for the current fiscal year (January 1, 2002 through December 31, 2002)
Sales Ordinary income Net income Millions of yen Millions of yen Millions of yen FY 2002 42,000 13,000 7,300
(2) Projected earnings for the next quarter (October 1, 2002 through December 31, 2002)
Sales Ordinary income Net income Millions of yen Millions of yen Millions of yen 4th Qtr 11,500 – 12,000 3,400 – 3,600 1,950 – 2,050
<Note> The business environment of the Trend Micro Group may change significantly and rapidly. Therefore, the Company has decided to disclose projected earnings range on a quarterly basis, but the actual earnings may deviate from the projection.
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.
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