CHECK POINT SOFTWARE TECHNOLOGIES LTD. REPORTS RECORD FINANCIAL RESULTS FOR 1997
REDWOOD CITY, CALIF., – January 22, 1998 – Check Point Software Technologies Ltd. (Nasdaq: CHKPF) today announced record financial results for the fourth quarter and for the fiscal year ended December 31, 1997. Revenues for the quarter were $29,587,000, compared to $11,623,000 for the same period in 1996, an increase of 155%. Net income for the quarter was $14,063,000, or $0.37 per share, compared to net income of $5,498,000, or $0.15 per share, in the same quarter in 1996, an increase of 156% in net income and 147% in net income per share. For the fiscal year ended December 31, 1997, revenues were $82,934,000 compared to $31,869,000 for 1996, an increase of 160%. Net income for the year was $40,208,000 or $1.07 per share, compared to net income of $15,237,000, or $0.43 per share in 1996, an increase of 164% in net income and 149% in net income per share over the prior year. "Fiscal 1997 was a tremendously successful year for Check Point Software Technologies, with the company achieving key milestones in furthering the company's overall market leadership, expanding the OPSEC initiative, establishing our leadership in the emerging VPN market, and diversifying the company's product lines beyond security into traffic management," said Gil Shwed, president and CEO of Check Point Software Technologies Ltd. "During the year, Check Point solidified its leadership position in enterprise network security, with the installed base growing to over 39,000 units. In addition, Check Point's OPSEC framework became the de facto standard for enterprise security, with over 110 software and hardware companies now in the OPSEC Alliance and committed to building products compliant with the framework." "In 1997, Check Point secured a leadership position in the emerging VPN market, with more than 5,000 networks worldwide using Check Point's VPN solution," continued Shwed. "The company's comprehensive, enterprise approach to VPNs, which was initially introduced when we first shipped a VPN product in 1995, has continued to evolve and consistently addresseses customer requirements for flexibility and manageability." Check Point's comprehensive and easy-to-use VPN solution continued the company's history of award-winning products, recognized by both Data Communications and BYTE magazines during the year. "Finally, in 1997, the company reached a major milestone in its mission to deliver secure enterprise connectivity solutions with its diversification beyond security into the broader traffic management market with the FloodGate-1 policy-based bandwidth manager." FloodGate-1 began shipping to customers in the fourth quarter of 1997. Partnerships were a key focus for Check Point in 1997, with the company inking numerous distribution agreements with OEMs and Internet Service Providers to extend its reach worldwide. Through OEM agreements with Hewlett-Packard and IBM, in addition to Sun, Check Point became the only network security solution available on all major system platforms. The company also solidified its presence on internetworking platforms through new agreements with 3Com Corporation, Ipsilon Networks (now Nokia), and TimeStep, in addition to Bay Networks and Xylan. In 1997, Check Point also became the dominant supplier of enterprise network security to the world's major telcos including Internet Service Providers (ISPs), through cooperation with AT&T, Alcatel Datacom, Deutsche Telecom, GTE Internetworking, Olivetti, MCI, USWest and WorldCom/UUNet Technologies, Inc. Product shipments on both Windows NT and UNIX platforms throughout the year continued solid growth, with Windows NT shipments accounting for 54% of worldwide channel units shipped in the fourth quarter (excluding Sun). OEM revenues, including revenues from SunSoft, Inc., accounted for 17% of overall revenues in the fourth quarter, with SunSoft, Inc. accounting for less than 13% of revenues. This marks the first quarter in which revenues were contributed by OEMs other than SunSoft, including Bay Networks, Hewlett-Packard, IBM, and Xylan. Check Point's worldwide presence grew significantly in 1997, with the company opening subsidiaries and offices in Germany, Japan, Australia, and Canada. Over 45% of all channel bookings (excluding OEMs) in 1997 came from outside North America. Despite the decline in bookings in the fourth quarter from Japan and Southeast Asia, the company experienced strong growth in all regions for the year. "The central theme for Check Point in the past year was diversification and expansion, in terms of strategic partnerships, distribution channels, and product offerings," said Deborah Triant, president and CEO of Check Point Software Technologies, Inc. "The milestones of 1997 enabled the company to solidify its leadership in delivering customer-driven enterprise security and traffic management solutions, providing secure enterprise connectivity to thousands of corporations worldwide."
About Check Point
Software Technologies Ltd. Note: The Company has implemented Statement of Financial Accounting Standards 128, "Earnings per Share" (EPS), which is effective for fiscal periods ending after December 15, 1997. This standard requires presentation of both basic and diluted EPS on the face of the earnings statement. Accordingly, these amounts appear on the financial statements attached to this release. SFAS 128 does not address which number needs to be discussed in the text of the earnings release, and, consistent with Check Point's past practice, the discussion of earnings per share in this release focuses on fully-diluted basis EPS. Assuming basic, net earnings per share of common stock were $0.42 (fully diluted = $0.37) per share in the fourth quarter of 1997, compared with $0.17 per share (fully diluted = $0.15) in the fourth quarter of 1996. For the full year 1997, net earnings per share of common stock, assuming basic, were $1.23 (fully diluted = $1.07) per share, compared with $0.49 (fully diluted = $0.43) per share in the year-earlier period. All of the statements contained in this press release that are not historical are forward looking statements. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results could differ materially from the company's current expectations. Factors that could cause or contribute to such differences include, but are not limited to, economic weakness in the Far East, the inclusion of network security functionality in hardware or system software, changes in the competitive landscape including new competitors and/or the impact of competitive pricing and products, dependence upon a limited number of key resellers, dependence upon a limited number of product lines, timely availability and acceptance of new products, the failure to manage growth and/or potential acquisitions, and other factors and risks discussed in the company's registration statement on Form F-1 dated May 6, 1997 and the other reports filed from time to time with the Securities and Exchange Commission including the company's annual report on Form 20-F. ### 1998 Check Point Software Technologies Ltd. Check Point, the Check Point logo, FireWall-1, FireWall-1 SecuRemote, FireWall-First!, OPSEC, INSPECT, FloodGate-1 and IQ Engine are trademarks or registered trademarks of Check Point Software Technologies Ltd. All other product names mentioned herein are trademarks of their respective owners.
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CHECK POINT SOFTWARE
TECHNOLOGIES LTD. (In thousands, except per share amount)
** Including $482,000 related to follow-on offering
CHECK POINT SOFTWARE
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