Net sales up 25% YoY and operating income rises 74% in 1Q2004
Tokyo, Japan – April 20, 2004 – Trend Micro, Inc. (TSE: 4704, NASDAQ: TMIC), a leader in network antivirus and Internet content security software and services, today announced earnings results for the first quarter 2004.
Trend Micro posted consolidated net sales of 13.6 billion Yen (or US $126 million, based on an exchange rate of 108 JPY = 1USD), operating income of 5.1 billion Yen (or US $48 million) and net income of 3.1 billion Yen (or US $29 million) for the first quarter 2004. These figures reflect gains of 25% in net sales, 74% in operating income and 81% in net income compared with the same period a year ago.
All regions worldwide experienced growth compared to the same quarter in 2003, most notably in the Europe, US, and Japan. Enterprise products represented 78% and consumer products represented 22% of net sales respectively.
"This quarter, we introduced new and innovative solutions such as Trend Micro Network VirusWall, that continue to deliver on the promises of our Enterprise Protection Strategy. We have also gained traction in our small and medium business product lines introduced late last year," commented Steve Chang, CEO and co-founder of Trend Micro, Inc. "Our core product lines continue to be healthy, and provide a solid foundation upon which we will continue to create new solutions for our customers that will fuel our growth in the future."
Based on information currently available to the company, consolidated net sales for the second quarter ending June 30, 2004 is expected to be 13.5 billion Yen (or US $125 million). Operating income and net income are expected to be 4.5 billion Yen (or US $42 million) and 2.7 billion Yen (or US $25 million), respectively.
Certain statements that we make in this release are forward-looking statements. These forward-looking statements are based upon management's current assumptions and beliefs in light of the information currently available to it, but involve known and unknown risks and uncertainties.
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 U.S. Securities and Exchange Commission.
*Figures for the First quarter of 2004 and 2003 are not audited.
(1) Consolidated Results of Operations
|Current first quarter
From January 1, 2004
To March 31, 2004
|Previous first quarter
From January 1, 2003
To March 31, 2003
|Millions of yen||Millions of yen||%|
|Cost of sales||912||804||13.3|
|Other income (expenses)||172||105||62.5|
|Income before income taxes
and equity in earnings of
|Equity in earnings of affiliated companies||9||1||1,222.1|
(2) Segment information Net sales to third parties
|As of March 31,2004||As of March 31,2003|
|Millions of yen||Millions of yen|
1.) Classification of countries and regions is based on our operating segments
2.)Classification of countries and regions into each segment
|North America :||U.S.A.|
|Europe :||Italy, Germany, France, UK, Ireland|
|Asia Pacific :||Taiwan, Korea, Australia, Hong Kong, Malaysia, New Zealand, China, Singapore|
|Latin America :||Brazil, Mexico|
3.) Basis of Consolidation
|The number of consolidated subsidiaries||18||(18 in overseas)|
|The number of unconsolidated subsidiaries|
4.) Increase (Decrease) of major assets, liabilities and shareholders' equity
|As of March 31, 2004||Increase
|As of December 31, 2003|
|(Assets)||Millions of yen||Millions of yen||Millions of yen|
|Cash and cash equivalents||43,782||-2,937||46,719|
|Notes and accounts receivable, trade
-less allowance for doubtful accounts and sales returns
|Marketable securities and securities investments||11,903||1,025||10,878|
(Total of current and long term)
|Long term debt
(Including current portion)
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, 2004 and 10,000 millions of yen as of December 31,2003 respectively) are disclosed in net amount in the balance sheet.
Projected earnings for the next quarter (April 1, 2004 through June 30, 2004)
|Net sales||Operating income||Net income|
|2nd Qtr||Millions of yen
|Millions of yen
|Millions of yen
(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 2004 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.
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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