Skip to content

2003 Finance Info

Trend Micro Announces First Quarter Consolidated Results

Q1 sales increase 12% year over year reaching new record highs

Tokyo, Japan – April 21, 2003 - Trend Micro Inc (TSE: 4704; Nasdaq:
TMIC), a leader in network antivirus and Internet content security
software and services, reported results in US GAAP for the first quarter, ended March 31, 2003. Trend Micro posted consolidated net sales of 10.9 billion yen, (or US$ 91. 0 million [1]) and operating income of 3.0 billion yen (or US$ 24. 7 million). The figures reflect gains of 12% in sales and -2% in operating income compared with the same period a year ago.

All major product lines grew compared to the same quarter in 2002. Enterprise products represented 82% of net sales in Q1, with Internet gateway and messaging groupware product revenue growing 15% year over year. Consumer product revenue grew 32% as compared with the same period a year ago.

"We are pleased to demonstrate growth over 2002, despite the global economic climate," said Steve Chang, Chairman and CEO of Trend Micro. "And we intend to emerge out of these challenging times in a continued leadership position by continuing to invest and focus on delivering the building blocks of our Enterprise Protection Strategy (EPS). We are gaining recognition for this unique approach. We believe our rapid progress in delivering EPS to the market with our partners has given us a substantial lead in offering real product capabilities that are usable today, versus others in the industry who are trying to achieve the same result through integrating acquisitions."

Consolidated net sales for the second quarter ending June 30 th are expected to be 11.5 billion yen (or US$ 95.8 million). Operating income is expected to be 2.9 billion yen (or US$ 24.2 million ).

The company also reported results for FY2002 in accordance with US GAAP of 43.0 billion yen (or US$ 358. 2 million) in net sales, 13.9 billion yen (or US$ 115.6 million) in operating income , and 7.7 billion yen (or US$ 64.3 million) in net income.

First Quarter Highlights:

  • Trend Micro™ Enterprise Protection Strategy was awarded PC Magazine's Editors' Choice for corporate antivirus software. Trend Micro was selected for the award due to its unique strength in outbreak containment, custom policies, remote administration, desktop-to-gateway solutions, and extensive support infrastructure. Trend Micro Enterprise Protection Strategy was selected for the award over products from Symantec and Network Associates.
     
  • In March 2003, META group named Trend Micro among the leaders in the antivirus space based on the company's gateway position, strong centralized management, and focus on the outbreak lifecycle.
  • Trend Micro introduced its Spam Prevention Service for enterprise customers, a service designed to block non-productive and malicious spam at the Internet gateway that utilizes heuristic technology. The new service was designed to interoperate seamlessly with Trend Micro's other antivirus and content security products.
  • In March, UBS Warburg ranked Trend Micro third in overall global channel satisfaction, making the company the highest ranked antivirus vendor in the study. The report also stated that customers of the channel partners surveyed preferred best-of-breed security solutions versus all-in-one, integrated security solutions.
  • Major customer additions worldwide during the quarter include Seiko Epson and Cable and Wireless. Customers from the g overnment, h ealthcare, and b anking sectors worldwide were most significant among new customers this quarter.

Notice Regarding Forward Looking Statements
S tatements 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 , among others, statements regarding our expectations about future dividend payments. 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 in successfully 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 July 1,2002 .

Supplementary Information

  1. The following tables show key financial information for the three months ended March 31, 2003 as announced by Trend Micro Japan.
  2. *Figures are in accordance with US GAAP and not audited.

    The amounts shown in U.S. dollars are for convenience only, exchanged at the rate of : 1US$=120 JPY

    (1) Consolidated Results of Operations

     

    FY2003

    FY2002

     

    Current first quarter

    Previous first quarter

    Growth Rate

    From January 1, 2003

    From January 1, 2002

    To March 31, 2003

    To March 31, 2002

     

    Millions of yen

    Thousands of US$

    Millions of yen

    Thousands of US$

    %

    Net sales

    10,918

    90,987

    9,752

    81,271

    12.0

    Cost of sales

    804

    6,706

    596

    4,969

    35.0

    Gross profit

    10,114

    84,281

    9,156

    76,302

    10.5

    Operating expenses

    7,153

    59,608

    6,128

    51,069

    16.7

    Operating income

    2,961

    24,673

    3,028

    25,233

    -2.2

    Other income (expense)

    105

    879

    41

    345

    154.8

    Income before income taxes and equity in gain of affiliated companies  

    3,066

    25,552

    3,069

    25,578

    -0.1

    Income taxes

    1,327

    11,058

    1,364

    11,372

    -2.8

    Equity in gain of affiliated companies

    1

    5

    0

    1

    475.7

    Net income

    1,740

    14,499

    1,705

    14,207

    2.1

    (2) Geographic segment information

    Net sales to third parties

     

    FY2003

    FY2002

    Current first quarter

    Previous first quarter

    From January 1, 2003

    From January 1, 2002

    To March 31,2003

    To March 31,2002

     

    Millions of yen

    Thousands of US$

    Millions of yen

    Thousands of US$

    Japan

    4,825

    40,209

    3,968

    33,064

    North America

    2,174

    18,120

    2,413

    20,108

    Europe

    2,615

    21,792

    2,194

    18,287

    Asia Pacific

    1,011

    8,426

    892

    7,439

    Latin America

    293

    2,440

    285

    2,373

    Total

    10,918

    90,987

    9,752

    81,271

    Deferred Revenue

     

    FY2003

    FY2002

     

    As of March 31,2003

    As of March 31,2002

     
     

    Millions of yen

    Thousands of US$

    Millions of yen

    Thousands of US$

     

    Japan

    7,814

    65,114

    5,850

    48,750

     

    North America

    4,008

    33,400

    2,647

    22,060

     

    Europe

    4,005

    33,373

    1,811

    15,092

     

    Asia Pacific

    1,011

    8,427

    615

    5,124

     

    Latin America

    310

    2,585

    300

    2,498

     

    Total

    17,148

    142,899

    11,223

    93,524

     

    <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

    Latin America : 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, 2003

    Increase

    (Decrease)

    As of December 31, 2002

    (Assets)

    Millions of yen

    Thousands of US$

    Millions of yen

    Thousands of US$

    Millions of yen

    Thousands of US$

    Cash and cash equivalents

    49,805

    415,041

    1,975

    16,459

    47,830

    398,582

    Notes and accounts receivable, trade

    -less allowance for doubtful accounts and sales returns  

    9,618

    80,147

    -1,707

    -14,228

    11,325

    94,375

    Marketable securities and securities investments

    3,814

    31,785

    376

    3,133

    3,438

    28,652

    (Liabilities)

               

    Deferred revenue

    (Total of current and long term)

    17,148

    142,899

    1,475

    12,293

    15,673

    13,606

    Long term debt (Total of current and long term)

    11,500

    95,833

    -

    -

    11,500

    95,833

    (Shareholders' equity)

               

    Treasury stock

    -2,823

    -23,528

    -501

    -4,176

    -2,322

    -19,352

    <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 pre-revised 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 March 31, 2003 and 10,000 millions of yen as of December 31,2002 respectively) are disclosed in net amount in the balance sheet.

    (5) Projected earnings for the next quarter ( April 1, 2003 through June 30, 2003 )

     

    Net sales

    Operating income

    Net income

     

    Millions of yen

    Thousands of US$

    Millions of yen

    Thousands of US$

    Millions of yen

    Thousands of US$

    2nd Qtr

    11,500

    95,833

    2,900

    24,167

    1,65 0

    13,750

    (Note) Since the business environment surrounding Trend Micro Group tends to fluctuate in the short run, it is difficult to make the highly reliable projection figures on a yearly basis. We, therefore, decided to announce the earnings on a quarterly basis in the fiscal year ending in December 2003 as well as earnings projection of the succeeding quarter.

    If we found through our calculation conducted from time to time that the net sales fluctuate from the most recent quarterly projection by more than 10%, or operating income or net income fluctuates by more than 30%, we will announce the revision of the earnings projection.

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.


Connect with us on