Trend Micro Reports Record Results for 2005
Tokyo, Japan – February 9, 2006 – Trend Micro Incorporated (TSE: 4704, NASDAQ: TMIC), a leader in network antivirus and Internet content security software and services, today announced earnings results for the fourth quarter and consolidated revenue for fiscal year 2005.
For the fourth quarter, Trend Micro posted a record 20.57 billion Yen ($175.1 million, 117.43JPY=1USD) in net sales, representing 16 percent growth year over year and 14 percent growth over the third quarter. Operating income for the quarter was 7.94 billion Yen ($67.6 million) and net income was 5.80 billion Yen ($49.3 million).
For 2005, Trend Micro posted record consolidated net sales of 73.03 billion Yen (or U.S. $621.9 million), representing an annual growth rate of 18 percent. The company also reported operating income of 27.57 billion Yen (or U.S. $234.8 million) and net income of 18.67 billion Yen (or US $159.0 million). Revenues from products and services sold to enterprise, mid-sized, and small business customers worldwide comprised 78 percent of 2005 revenues; revenue from consumer products comprised the remaining 22 percent.
Trend Micro continued to experience growth worldwide, most notably in North America where sales grew 30 percent annually. In particular, the region experienced 56 percent growth in consumer sales. In the Japan and Asia-Pacific regions, annual sales increased 16 and 25 percent, respectively.
“2005 was a significant year for our company,” said Eva Chen, CEO of Trend Micro. “We did a lot in the last year to build a strong foundation that we believe positions us for the next stage of growth and continued leadership.Our future growth will be fuelled not only by our technological innovation but by continuously understanding our customers and delivering solutions that exceed their expectations.”
Based on information currently available to the company, consolidated net sales for the first quarter ending March 31, 2006, is expected to be 19.5 billion Yen (or U.S. $165.3 million, based on an exchange rate of118PY = 1USD). Operating income and net income are expected to be 7.8 billion Yen (or U.S. $66.1 million) and 4.4 billion Yen (or U.S. $37.3 million), respectively.
2005 Business Highlights
Awards and Recognitio
Corporate
– Trend Micro was listed on the Dow Jones Sustainability Indexes for the second consecutive year.
– For the second year in a row, VARBusiness magazine named Trend Micro Company of the Year and awarded it the Product Innovation Annual Report Card Award.
– In March, Trend Micro Premium Support won the SSPA STAR Award 2005 for Best Practices.
– For the third consecutive year, Trend Micro was acknowledged as the No.1 global brand in Taiwan, according to a study by global brand consultancy Interbrand.
Products
– Trend Micro PC-cillin Internet Security 2005 and OfficeScan achieved the industry’s first spyware certification.
– Trend Micro’s ScanMail was named 2005 Readers’ Choice Award Winner by Windows IT Pro in the Antivirus/Mail Server category of the 2005 Windows IT Pro Readers’ Choice Awards.
– In May, PC-cillin won Editor’s Choice from Entrepreneur Magazine.
– In January, Trend Micro was voted the “Best Solution” by Tech Data’s TechSelect Member.
Products and Innovation
In 2005, Trend Micro introduced the following new products to complement its existing multi-threat security solutions for gateways, servers, desktops, mobile devices, etc.:
– Anti-Spyware Solutions – Shortly after acquiring InterMute, Trend Micro, delivered versatile anti-spyware solutions that feature standalone and integrated deployment options for large enterprises, small and medium businesses, and consumers. The solutions provide multi-layered options for delivering anti-spyware protection throughout the network environment – from the gateway to the desktop.
– Trend Micro Network Reputation Services (Trend Micro RBL+ and Network Anti-Spam Services) – Resulting from the Kelkea acquisition, these service-based solutions provide a first line of defense that stops spam at its source — before it reaches the network. Real-time spam blocking identifies new sources of spam, including zombies and botnets, as soon as they begin spamming.
– Communication and Collaboration Solutions — Trend Micro launched a group of solutions offering enhanced antivirus, content, and anti-spam protection for email, instant messaging, and collaboration environments. These solutions include Trend Micro ScanMail for Exchange 7.0, Trend Micro ScanMail Lotus Domino 3.0, Trend Micro Instant Messaging Security for Microsoft Office Live Communication Server, Trend Micro PortalProtect for Microsoft SharePoint, InterScan Messaging Security Suite, and Spam Prevention Solution.
Corporate and Business Highlights
– Trend Micro’s strategic alliance partner Cisco announced a number of outbreak prevention solutions, including the Cisco Incident Control System, which the two companies developed jointly.
– Trend Micro announced that leading computer system manufacturer Dell is offering North American customers the choice to pre-install Trend Micro PC-cillin Internet Security on new desktop and notebook systems.
– In August, the U.S. International Trade Commission issued a final ruling in Trend Micro’s patent infringement lawsuit against Fortinet, ordering the Sunnyvale, CA-based company to stop advertising, distributing, importing, and selling FortiGateâ„? products in the United States. The decision validated Trend Micro’s patent involving virus scanning at the server and gateway.
* On January 30, 2006, Tend Micro Inc. and Fortinet, Inc. announced that the two companies have reached a settlement in a longstanding patent dispute involving Fortinet’s alleged infringement of Trend Micro’s U.S. Patent 5,623,600.
– To ensure continued innovation and sharpen its focus on new and emerging threats, Trend Micro announced the appointment of three chief technologists. Raimund Genes as chief technologist for anti-malware; Ed English as chief technologist post for anti-spyware; and Dave Rand as chief technologist of Internet content security.
– New customers in the fourth quarter included: Chunghwa Telecom (Taiwan), Hydro One (Canada), National Library of Medicine (U.S.), North Carolina Farm Bureau Insurance Group (U.S.).
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, 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.