Trend Micro Reports Record Fourth Quarter Results And Consolidated Revenue for 2004
Trend Micro Reports Record Fourth Quarter Results And Consolidated Revenue for 2004
Growth fueled by continued momentum in both enterprise and consumer segments
Tokyo, Japan - February 3, 2005 - Trend Micro, Inc. (TSE: 4704, NASDAQ: TMIC), a leader in network antivirus and Internet content security software and services, today announced record revenue for the fourth quarter 2004 and record net sales results for the year ended December 31, 2004 (both U.S. GAAP).
For the fourth quarter, Trend Micro posted consolidated net sales of 17.7 billion Yen (or US $167.9172 million, based on an exchange rate as of January 28, 2005 of 103105.63JPY = 1USD), operating income of 7.88 billion Yen (or US $74.66.5 million), and net income of 4.7 billion Yen (or US $44.946 million), marking a 32% growth in net sales and a 50% rise in operating income compared to the same period a year ago.
The strong global performance in the fourth quarter helped Trend Micro set an all-time high in annual net sales. For 2004, Trend Micro generated 62.05 billion Yen (or US $587602.4.4 million) in net sales, reflecting an increase of 29% from 2003. Operating income was 26.08 billion Yen (or US $246.953 million) for the year, up 72% from 2003, and net income was 15.8 billion Yen (or US $150.34 million), also up 72% from the previous year.
"2004 was an exciting year for Trend Micro, and during this time we introduced many new innovations, such as Network VirusWall, and established agreements with leading industry providers like Cisco and MSN Hotmail that we believe will position us for continued success in 2005 and beyond," said Eva Chen, CEO and co-founder of Trend Micro. "As our customers' needs evolve, our focus remains unwavering - to deliver timely updates and protect our customers from malicious threats amid an increasingly unpredictable environment."
Continued demand for comprehensive protection in the enterprise and consumer environments resulted in strong growth across the company's various product lines. In 2004, gateway suite products grew 131% compared to the previous year, and consumer products experienced a 39% year-over-year increase. Enterprise products comprised 78% of total annual revenues for 2004, with consumer products comprising 22%.
Worldwide performance was strong throughout the year, highlighted by Japan, Europe, and the United States.
The company plans to pay cash dividends of 4.7 billion Yen, or 36 Yen per share, for 2004. The payout ratio is 30%.
Based on information currently available to the company, consolidated net sales for the first quarter ending March 31, 2005 is expected to be 16.3 billion Yen (or US $158 million, based on an exchange rate as of January 28, 2005 of 103JPY = 1USD). Operating income and net income are expected to be 6.2 billion Yen (or US $60 million) and 3.8 billion Yen (or US $36.9 million), respectively.
Fourth Quarter Business Highlights
* Hotmail & Trend Micro
An agreement with MSN Hotmail was established in which Trend Micro's technology will provide antivirus scanning and cleaning protection for its Web-based services. The agreement calls for Trend Micro to protect nearly 200 million email accounts from the latest viruses, Trojans, and worms that may be hidden in email attachments. MSN Hotmail's Trend Micro-backed services commenced worldwide in December 2004.
* Awards & Recognition
Trend Micro won the Frost and Sullivan Award for Competitive Strategy Leadership, an award based on Frost and Sullivan's annual survey of key antivirus industry players. Trend Micro won the award based on its progress on several fronts: Revenue growth, market share gained, profitability, strategic alliances, customer service and support, and general market strength. Trend Micro was also named to the ranks of the Deloitte Technology Fast 500 Asia Pacific, which recognizes technology companies that have achieved certain rates of annual revenue growth in Asia Pacific during the past three years.
Trend Micro products received several honors, including the Editor's Choice award from Technology and Business magazine for Trend Micro InterScan(tm) Web Security Suite version 2.0, and the CNET Editors' Choice Award 2004 for Trend Micro PC-cillin(tm) Internet Security 2005. PC-cillin Internet Security 2005 was also named to the Computer Shopper Top 100 list.
* Support & Service
Trend Micro's TrendLabs headquarters (Manila, Philippines) was awarded certification for British Standards 7799 for meeting requirements of the British Standards Institute for information management systems. Satisfying these standards helps ensure that Trend Micro's customers are supported by TrendLabs in the midst of day-to-day security risks, computer intrusion, power outages, physical disasters, and other threats.
* Products & Innovation
In the fourth quarter, Trend Micro's family of revolutionary outbreak prevention appliances was extended with the introduction of Trend Micro Network VirusWall(tm) 2500 and 300. These appliance-based products introduced greater flexibility in enforcing network security policies to help stop the damaging effects of network worms - from globally distributed enterprise environments to single, mission-critical devices. The company also introduced Trend Micro Mobile Security, which provides antivirus and anti-spam protection for SMS messaging customers using data-centric mobile phones and PDAs.
* Enterprise Segment
New customers and new business gained during the quarter included Nextel, Inc., a provider of fully integrated wireless communications services in the United States. In Japan, Trend Micro began providing threat lifecycle management services to Information and Telecommunication Systems of Hitachi, Ltd. and Hitachi Electronics Services Co., Ltd.
* Consumer Segment
Distribution for Trend Micro PC-cillin Internet Security 2005 was expanded to include major national retailers in North America, including Best Buy and CompUSA.
Notice Regarding Forward-looking Statements
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:
* Difficulties in addressing new virus and other computer security problems
* Timing of new product introductions and lack of market acceptance for our new products
* The level of continuing demand for, and timing of sales of, our existing products
* Rapid technological change within the antivirus software industry
* Changes in customer needs for antivirus software
* Existing products and new product introductions by our competitors and the pricing of those products
* Declining prices for products and services
* The effect of future acquisitions on our financial condition and results of operations
* The effect of adverse economic trends on our principal markets
* The effect of foreign exchange fluctuations on our results of operations
* An increase in the incidence of product returns
* The potential lack of attractive investment targets and
* Difficulties in successfully executing our investment strategy 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.
About Trend Micro
Trend Micro, Inc. is a leader in network antivirus and Internet content security software and services. The Tokyo-based corporation has business units worldwide. Trend Micro products are sold through corporate and value-added resellers and managed service providers. For additional information and evaluation copies of all Trend Micro products, visit our Web site, www.trendmicro.com.
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Trend Micro, the t-ball logo, InterScan, PC-cillin, and VirusWall are trademarks or registered trademarks of Trend Micro Incorporated. TrendLabs is a service mark of Trend Micro Incorporated. All other company or product names may be trademarks or registered trademarks of their owners.
For additional Information
Mr. Mahendra Negi
Chief Financial Officer / IR Officer