Trend Micro Reports Second Quarter Results
August 10 2006 - 3:00AM
PR Newswire (US)
All Regions Achieve Double-Digit Growth; Sales in Small and Medium
Business Sector Highlight Quarter TOKYO, Aug. 10
/Xinhua-PRNewswire-FirstCall/ -- Trend Micro, Inc. (TSE: 4704;
Nasadq: TMIC), a leader in network antivirus and Internet content
security software and services, today announced earnings results
for the second quarter 2006. Trend Micro posted consolidated net
sales of 20.08 billion Yen (or US $174.98 million, 114.75 JPY =
1USD), operating income of 5.37 billion Yen (or US $46.81 million)
and net income of 3.04 billion Yen (or US $26.52 million) for the
second quarter 2006. These figures reflect an increase of 17% in
net sales compared with the same period in the previous year.
Operating income was down 2% from the same quarter in the previous
year. Following the revision of its deferred revenues, the company
still continued to see steady growth around the world, with each of
its regions achieving double-digit revenue growth during the second
quarter of 2006. North American operations experienced 18 percent
revenue growth year-on-year; Europe, Middle East and Africa (EMEA)
experienced 15 percent growth; Japan 14 percent, and the
Asia-Pacific region a 13 percent year-over-year increase in
revenue. Continued, solid growth in the company's small and medium
business solutions and consumer business helped boost worldwide
revenue with 22 and 21 percent year-on-year increases respectively.
"In the second quarter of 2006, we continue to benefit from solid
growth in strategic markets such as North America. We are also very
pleased with the growth we have sustained in areas such as the
small and medium-sized business sector," said Eva Chen, CEO of
Trend Micro. "We believe the commitment we have to protecting our
customers' digital assets from malicious attacks through security
solutions designed to fit the specific needs of the different types
of customers we serve, will help enable long-term enduring growth."
Based on information currently available to the company,
consolidated net sales for the third quarter ending September 30,
2006 is expected to be 20.50 billion Yen (or US $178.26 million,
based on an exchange rate of 115 JPY = 1USD). Operating income and
net income are expected to be 6.00 billion Yen (or US $52.17
million) and 3.30 billion Yen (or US $28.70 million), respectively.
Second Quarter Business Highlights Products and Innovation Trend
Micro introduced the following products in the second quarter 2006:
Email Security Services -- Trend Micro launched a managed email
service for Small and Medium-sized businesses in May 2006,
available initially in North America and Australia. This service
protects a small and medium business network and infrastructure by
stopping threats before they reach the customer's gateway. Trend
Micro PC-cillin Internet Security for Microsoft Vista Beta
Customers -- offers Windows Vista customers advanced features,
beyond standard antivirus and firewall protection, helping to
safeguard PCs from new emerging threats like phishing attacks,
network viruses, spam, Wi-Fi intrusions and spyware programs.
Corporate and Business Highlights By the end of the second quarter,
Trend Micro HouseCall, the malware scanning service recorded the
100-millionth malware infection of 2006. The web-based solution is
designed to scan a PC for a wide range of Internet security threats
including viruses, worms, Trojans, and spyware. In April, Trend
Micro announced an extension to its agreement with Microsoft
Corporation, to provide antivirus scanning to MSN Hotmail
customers. Dave Rand, CTO for Trend Micro Internet Content
Security, addressed the Messaging Anti-Abuse Working Group General
Meeting in June, where he presented validation that botnets are now
the primary source of spam. The creation of 100 new jobs was
announced at the Trend Micro Operations Centre in Cork, Ireland.
The central office provides a shared service and serves as the
support centre for customers throughout Europe, Middle East and
Africa. New customers and new business in the second quarter
included: Sogique in Canada, Okuma in North America, Koscom and
Hanjin Shipping in Korea, Beijing Mobile, Guangdong Telecom, The
People's Bank of China and Sinopec (China Petroleum & Chemical
Corporation) in China. 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, Inc. Trend Micro Incorporated is a pioneer in secure content
and threat management. Founded in 1988, Trend Micro provides
individuals and organizations of all sizes with award-winning
security software, hardware and services. With headquarters in
Tokyo and operations in more than 30 countries, Trend Micro
solutions are sold through corporate and value-added resellers and
service providers worldwide. For additional information and
evaluation copies of Trend Micro products and services, visit our
Web site at http://www.trendmicro.com/ . Trend Micro, the t-ball
logo, OfficeScan, 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. Supplementary Information (1) CONSOLIDATED BALANCE SHEETS
(Thousands of yen) Account June 30, June 30, December 31, 2005 2005
2006 Amount % Amount % Amount % Current assets: Cash and cash
equivalents 55,797,854 71,118,356 59,612,577 Time deposits 906,397
1,038,871 1,435,293 Marketable securities 14,915,254 22,566,765
22,395,365 Notes and accounts receivable, trade -less allowance for
doubtful accounts of -June 30, 2005 (Yen) 381,428 -June 30, 2006
(Yen) 383,294 and December 31, 2005 (Yen) 282,257 -less sales
returns allowance of -June 30, 2005 (Yen) 695,848 -June 30, 2006
(Yen) 517,796 and December 31, 2005 (Yen) 422,453 in FY2005
13,742,453 15,827,083 19,198,870 Inventories 280,722 496,261
359,897 Deferred income taxes 6,272,727 7,985,215 6,727,229 Prepaid
expenses and other current assets 1,457,490 2,603,035 1,925,791
Total current assets 93,372,897 83.7 121,635,586 83.5 111,655,022
84.0 Investments and other assets: Investment Securities 9,321,151
12,469,433 11,159,428 Investments in and advances to affiliate
companies 206,944 297,511 321,569 Software development costs, net
640,578 1,012,239 1,174,691 Other intangibles, net 1,260,470
1,781,019 1,390,434 Goodwill 2,442,109 2,079,121 2,130,179 Deferred
income taxes 1,543,222 2,883,907 2,033,488 Other 662,846 751,433
671,800 Total investments and other assets 16,077,320 14.4
21,274,663 14.6 18,881,589 14.2 Property and equipment: Office
furniture and equipment 3,841,551 4,981,586 4,468,891 Other
properties 1,349,320 1,830,459 1,539,195 5,190,871 6,812,045
6,008,086 Less: Accumulated depreciation (3,094,701) (4,065,622)
(3,609,473) Property and equipment, net 2,096,170 1.9 2,746,423 1.9
2,398,613 1.8 Total assets 111,546,387 100.0 145,656,672 100.0
132,935,224 100.0 (Thousands of yen) Account June 30, June 30,
December 31, 2005 2005 2006 Amount % Amount % Amount %