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2002 Finance Info

Trend Micro Announces Record First Quarter Consolidated Results

Sales grow 47% YoY and ordinary income rises 36% in 1Q 2002

Tokyo, Japan - April 19, 2002 - Trend Micro Inc. (TSE: 4704; Nasdaq: TMIC), a worldwide leader in network antivirus and Internet content security solutions, reported consolidated net sales of 9,752 million yen, or US $ 75,02 million, and ordinary income of 3,068 million yen, or US $23,60 million, for the first quarter of fiscal 2002, ended March 31, 2002. The figures reflect gains of 47.2% in sales and 36.3% in ordinary income compared with the same period a year ago. (Exchange rate 1US$ = 130 JPY)

1. Consolidated Unaudited Results of Operations for First Quarter Ending March 31, 2002 (Japanese GAAP)
*Figures for the first quarter of 2002 and 2001 are not audited, and figures in US$ are just pro forma, exchanged by rate: 1US$=130JPY.

(1) Consolidated Results of Operations


2002

2001


Current first quarter

Previous first quarter

Growth Rate

From January 1, 2002

From January 1, 2001

To March 31, 2002

To March 31,2001

Millions of yen

Millions of US$

Millions of yen

Millions of US$

%

Sales

9,752

75.02

6,626

50.97

47.2

Cost of sales

596

4.59

395

3.04

50.8

Gross profit

9,156

70.43

6,230

47.93

46.9

Selling, general and administrative expenses

6,125

47.12

4,226

32.51

44.9

Operating income

3,030

23.31

2,004

15.42

51.2

Non-operating income

119

0.92

458

3.53

-73.9

Non-operating expense

79

0.61

210

1.62

-62.2

Ordinary income

3,070

23.62

2,252

17.33

36.3

Unusual gains

-

-


Unusual losses

2

0.02

Income before taxes <Note:>

3,068

23.60

Corporate, inhabitant and enterprise tax

1,365


Net income <Note>

1,702

13.10


Note: Trend Micro has begun reporting its income before taxes and net income in this first quarter of 2002. Figures for Trend Micro’s income before taxes and net income for the first quarter of 2001 are not available.

(2) Geographic segment information
Sales to third parties


2002

2001

Current first quarter

Previous first quarter

From January 1, 2002

From January 1, 2001

To March 31,2002

To March 31,2001


Millions of yen

Millions of US$

Millions of yen

Millions of US$

Japan

3,967

30.52

2,619

20.15

North America

2,412

18.56

2,003

15.41

Europe

2,194

16.88

1,340

10.31

Asia and Oceania

892

6.87

480

3.69

Others

284

2.19

182

1.40

Total

9,752

75.02

6,626

50.97

<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 and Oceania : Taiwan, Korea, Australia, Hong Kong, Malaysia, New Zealand, China

Others : Brazil, Mexico


(3) Basis of consolidation

The number of consolidated subsidiaries

16

(16 in overseas)

The number of unconsolidated subsidiaries

-



(4) Increase (Decrease) of major assets and liabilities


As of March 31, 2002

Increase

(Decrease)

As of December 31, 2001

(Assets)

Millions of yen

Millions of US$

Millions of yen

Millions of US$

Millions of yen

Millions of US$

Cash and bank deposits

43,067

331.29

2,214

17.04

40,853

314.26

Notes and accounts receivable, trade

10,180

78.31

-2,100

16.16

12,280

94.47

Investments in securities

2,917

22.45

388

3.00

2,529

19.45

(Liabilities)







Deferred revenue

(Total of short and long term)

11,222

86.33

963

7.41

10,259

78.92

Bonds(Total of short and long term)

14,500

111.54

0

0

14,500

111.54

Note: In order for the warrants to be granted or transferred to the directors and certain employees of the Company and 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 (6,800 millions of yen as of March 31, 2002 and as of December 31,2001 respectively) are disclosed in net amount in the balance sheet.

  1. Projected consolidated earnings

(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 US$*)

Millions of yen

(Millions of US$*)

Millions of yen

(Millions of US$*)

FY 2002

40,000

(307.69)

13,000

(100.00)

7,300

(53.15)

  1. Projected earnings for the next quarter (April 1, 2002 through June 30, 2002)


Sales

Ordinary income

Net income


Millions of yen

(Millions of US$*)

Millions of yen

(Millions of US$*)

Millions of yen

(Millions of US$*)

2nd Qtr

9,800 - 10,300

(75.38 – 79.23)

2,450 – 2,750

(18.85 – 21.15)

1,350 – 1,550

(10.38 – 11.92)

*Exchange rate : 1US$=130JPY

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.

Notice Regarding Forward Looking Statements
These forward-looking statements include statements regarding our expectations about our earnings for the fiscal 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:

  • Customer acceptance of our new products and services

  • The impact of competing products and services

  • Difficulties in adapting our products and services to the Internet

  • Difficulties in addressing new virus and other computer security problems

  • The potential lack of attractive investment targets and difficulties unsuccessfully executing our investment strategy

  • Declining prices for our products and services

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 June 29,2001.

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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