Form 6-K
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Commission File Number: 333-10486


For the Month of February 2005


Trend Micro Incorporated

(Translation of registrant’s name into English)



Shinjuku MAYNDS Tower, 1-1, Yoyogi 2-chome,

Shibuya-ku, Tokyo 151-0053, Japan

(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.


Form 20-F      X            Form 40-F            


Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    


Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    


Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes               No     X    


If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            


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Information furnished on this form:


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1.    Press release dated February 3, 2005, relating to the announcement of earnings results of the fourth quarter 2004 and annual earnings results for the year ended December 31, 2004.     

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





February 8, 2005


/s/    MAHENDRA NEGI        


Mahendra Negi

Representative Director, Chief Financial Officer and

Executive Vice President

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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 $167.9 million, 105.63JPY = 1USD), operating income of 7.88 billion Yen (or US $74.6 million), and net income of 4.7 billion Yen (or US $44.9 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 $587.4 million) in net sales, reflecting an increase of 29% from 2003. Operating income was 26.08 billion Yen (or US $246.9 million) for the year, up 72% from 2003, and net income was 15.8 billion Yen (or US $150.3 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.

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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 Web Security Suite version 2.0, and the CNET Editors’ Choice Award 2004 for Trend Micro PC-cillin 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 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.

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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,


# # #


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

Phone: +81-5334-4899

Fax: +81-5334-4874

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Supplementary Information





   December 31,


December 31,





Current assets:


Cash and cash equivalents

   46,718,940     52,908,357  

Time deposits

   440,323     383,276  

Marketable securities

   4,769,935     15,288,575  

Notes and accounts receivable, trade –less allowance for doubtful accounts and sales returns of
(Yen) 1,023,734 in FY2003 and
(Yen) 864,938 in FY2004, respectively

   11,681,457     15,245,213  


   77,950     201,243  

Deferred income taxes

   4,894,387     6,224,972  

Prepaid expenses and other current assets

   1,397,821     1,560,058  


Total current assets

   69,980,813     91,811,694  


Investments and other assets:


Securities investments

   6,107,872     9,831,913  

Investment in and advances to affiliated companies

   119,591     175,281  

Software development costs

   505,616     438,464  

Other intangibles

   311,756     296,368  

Deferred income taxes

   1,806,760     1,695,771  


   734,533     636,009  


Total investments and other assets

   9,586,128     13,073,806  


Property and equipment:


Office furniture and equipment

   2,823,506     3,323,526  

Other properties

   1,038,524     1,165,173  


     3,862,030     4,488,699  

Less: Accumulated depreciation

   (2,157,884 )   (2,640,288 )


Total property and equipment

   1,704,146     1,848,411  


Total assets

   81,271,087     106,733,911  




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December 31,



December 31,



<Liabilities and shareholders’ equity>


Current liabilities:


Current portion of long-term debt

   6,500,000     —    

Notes payable, trade

   96,204     88,087  

Accounts payable, trade

   899,508     1,271,067  

Accounts payable, other

   1,326,244     2,699,762  

Withholding income taxes

   490,315     882,693  

Accrued expenses

   1,984,175     2,143,694  

Accrued income and other taxes

   4,280,797     7,192,085  

Deferred revenue

   17,486,298     24,634,662  


   557,050     651,503  


Total current liabilities

   33,620,591     39,563,553  


Long-term liabilities:


Deferred revenue

   3,017,105     3,268,892  

Accrued pension and severance costs

   487,409     656,041  


   194,185     70,665  


Total long-term liabilities

   3,698,699     3,995,598  


Shareholders’ equity:


Common stock




-December 31, 2003 250,000,000 shares (no par value)


-December 31, 2004 250,000,000 shares (no par value)




-December 31, 2003 132,620,100 shares


-December 31, 2004 135,755,872 shares


Additional paid-in capital

   13,165,881     17,359,335  

Retained earnings

   28,236,466     42,165,026  

Accumulated other comprehensive income


Net unrealized gain (loss) on debt and equity securities

   70,965     284,348  

Cumulative translation adjustments

   (500,946 )   (606,463 )


     (429,981 )   (322,115 )


Treasury stock, at cost


-December 31, 2003    1,958,647 shares

   (4,416,763 )      

-December 31, 2004    2,588,439 shares

         (7,454,463 )


Total shareholders’ equity

   43,951,797     63,174,760  


Total liabilities and shareholders’ equity

   81,271,087     106,733,911  


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(Thousands of yen)



   For the year ended
December 31, 2003


For the year ended

December 31, 2004




Net sales

   48,088,347     62,049,254     29.0

Cost of sales

   3,168,467     3,236,499      



Gross profit

   44,919,880     58,812,755     30.9



Operating expenses:



   15,360,532     16,009,409      

Research and development and maintenance

   3,919,024     4,858,259      

Customer support

   4,830,660     5,723,426      

General and administrative

   5,656,168     6,143,985      



Total operating expenses

   29,766,384     32,735,079      



Operating income

   15,153,496     26,077,676     72.1



Other incomes (expenses):


Interest income

   412,635     451,217      

Interest expense

   (173,830 )   (87,464 )    

Gain (loss) on sales of marketable securities

   (65,259 )   101,199      

Impairment loss of securities investments

   (7,360 )   —        

Foreign exchange gain (loss), net

   120,650     (183,292 )    

Other income (expense), net

   (111,345 )   (34,350 )    



Total other income (expense)

   175,491     247,310      



Net income before tax

   15,328,987     26,324,986     71.7



Income taxes:



   7,437,576     11,893,659      


   (1,334,998 )   (1,390,387 )    


     6,102,578     10,503,272      



Income before equity in earnings (losses) of affiliated companies

   9,226,409     15,821,714     71.5

Equity in earnings (losses) of affiliated companies

   23,623     53,122      



Net income

   9,250,032     15,874,836     71.6



Per share data:




Net income



   70.11     120.64     72.1


   69.95     118.59     69.5



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(Thousands of yen)




For the year ended

December 31,



For the year ended

December 31,



Net income

   9,250,032     15,874,836  


Other comprehensive income (loss), before tax:


Unrealized gains (losses) on debt and equity securities:


Unrealized holding gains (loss) arising during period

   135,323     514,117  

Less reclassification adjustment for gains or losses included in net income

   132,701     (143,702 )


     268,024     370,415  

Foreign currency translation adjustments

   (786,025 )   (105,517 )



   (518,001 )   264,898  

Income tax expense related to unrealized gains (losses) on debt and Equity securities

   (113,182 )   (157,032 )


Other comprehensive income (loss), net of tax

   (631,183 )   107,866  


Comprehensive income

   8,618,849     15,982,702  




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(Thousands of yen)




For the year ended

December 31,



For the year ended

December 31,



Cash flows from operating activities:


Net income

   9,250,032     15,874,836  

Adjustments to reconcile net income to net cash provided by operating activities -


Depreciation and amortization

   2,266,356     1,590,743  

Pension and severance costs, less payments

   140,661     166,649  

Deferred income taxes

   (1,334,998 )   (1,390,387 )

(Gain) loss on sales of marketable securities

   65,259     (101,199 )

Impairment of securities investments

   7,360     —    

Equity in earnings of affiliated companies

   (23,623 )   (53,122 )

Changes in assets and liabilities:


Increase in deferred revenue

   5,036,872     7,293,488  

(Increase) decrease in accounts receivable, net of allowances

   (446,201 )   (3,421,729 )

(Increase) decrease in inventories

   278,751     (124,093 )

Increase (decrease) in notes and accounts payable, trade

   (52,021 )   379,882  

Increase (decrease) in accrued income and other taxes

   193,227     2,912,481  

(Increase) decrease in other current assets

   (67,898 )   (90,479 )

Increase (decrease) in accounts payable, other

   (11,962 )   823,199  

Increase in other current liabilities

   602,296     1,107,855  

(Increase) decrease in other assets

   (324,879 )   110,628  


   87,072     (178,744 )


Net cash provided by operating activities

   15,666,304     24,900,008  


Cash flows from investing activities:


Payments for purchases of property and equipment

   (715,901 )   (801,935 )

Software development cost

   (788,760 )   (645,166 )

Payments for purchases of other intangibles

   (270,570 )   (229,167 )

Proceeds from sales of marketable securities

   2,945,331     4,986,012  

Payment for purchase of marketable securities within three months or less (net)

   —       (2,156,191 )

Payments for purchases of marketable securities and security investments

   (10,248,908 )   (17,240,100 )

(Payments for)/Proceed from time deposits

   (374,601 )   57,047  


Net cash used in investing activities

   (9,453,409 )   (16,029,500 )


Cash flows from financing activities:


Issuance of common stock pursuant to exercise of stock purchase warrants and stock acquisition rights

   278,002     8,049,004  

Redemption of bonds

   (5,000,000 )   (6,500,000 )

Purchase of treasury stock (net of proceeds)

   (2,094,476 )   (3,165,679 )

Tax benefit from exercise of non-qualified stock warrants

   233,277     498,905  

Tax recognition derived from elimination of reversed warrant related With stock option plan

   (228,085 )   (312,708 )

Dividend paid

   —       (1,819,607 )


Net cash used in financing activities

   (6,811,282 )   (3,250,085 )


Effect of exchange rate changes on cash and cash equivalents

   (512,494 )   568,994  


Net increase (decrease) in cash and cash equivalents

   (1,110,881 )   6,189,417  

Cash and cash equivalents at beginning of period

   47,829,821     46,718,940  


Cash and cash equivalents at end of period

   46,718,940     52,908,357  


Supplementary information of cash flow:


Payment for interest expense

   151,623     114,121  

Payment for income taxes

   7,102,721     8,990,398