Check Point Software Technologies LTD. Reports Financial Results for Third Quarter 2002
REDWOOD CITY, Calif.-October
17, 2002-- Check Point Software Technologies
Ltd. (Nasdaq: CHKP), the worldwide leader in securing the Internet,
today announced its financial results for the third quarter ended
September 30, 2002.
Net income for the quarter was $62.3 million, or $0.25 per share,
compared to $64.7 million, or $0.26 per share (diluted) for the
second quarter of 2002. Revenues for the quarter were $103.6 million
compared to $108.6 million for the second quarter of 2002 . Total
cash and interest bearing investments grew to over $1.2 billion
as of September 30, 2002.
"Our third quarter performance demonstrated Check Point's Internet
security market strength and business execution," said Gil
Shwed, chairman and chief executive officer of Check Point Software
Technologies. "Despite the macro-economic environment, Check
Point continued to deliver solid revenue and earnings results, win
significant deals, bring to market new solutions and execute cost-effectively."
Recent highlights include:
- Independent Study: Check Point Leads in Performance & Price - In independent lab tests by Tolly Group for high-end enterprise firewall/VPN solutions, Check Point's $16,000 solution beat Cisco and NetScreen $65,000 and $35,000 solutions by a factor of 5 in real world VPN environments.
- Extended Market Leadership - In an IDC study published this quarter, Check Point has extended its market share in the enterprise firewall/VPN software from 61% to 65% in the past year. In addition, Gartner, Inc. named Check Point a leader in two of its prestigious VPN and Firewall Magic Quadrant reports for the second year in a row.
- New "Secured by Check Point" Appliances - Brought to market 10 new "Secured by Check Point" appliances with partners Nokia (NYSE:NOK), IBM Corporation (NYSE: IBM), Bivio NetworksÔ, Celestix Networks, Inc. and Intrusion, Inc.
- Next Generation Active Security - SmartDefense - Check Point's new SmartDefense technology shipped this quarter and won the "Hot Pick" technology spotlight from Information Security Magazine. In addition, SmartDefense is now serving as a basis for the first comprehensive intelligence solution to combat cyber attacks through collaboration with the SANS Institute's Storm Center.
- Expanded Global Partnerships - Enhanced the "Power of Two" alliance with Nokia to offer customers a "one-stop" shopping experience for unprecedented flexibility and choice in purchasing Check Point's market-leading security solutions directly from Nokia. Also began executing on worldwide agreement with HP to deliver end-to-end VPN/security solutions on multiple HP platforms.
- NASA Commendation - NASA/Marshall Space Flight Center honored Check Point for outstanding support and superior VPN and SecureXL performance solutions that are enabling secure, reliable communication between the Space Station and numerous sites on Earth.
"In the third quarter we continued to expand our partnerships and market leadership," Mr. Shwed continued. "Together with our partners, we delivered new and innovative solutions. These solutions continue to provide our customers with the highest level of security with the best performance and as important, the best price/performance."
About Check Point Software Technologies
Check Point Software Technologies is the worldwide leader in securing the Internet. It is the market leader in both the worldwide VPN and firewall markets. The company's Secure Virtual Network (SVN) architecture provides the VPN and security infrastructure that uniquely enables secure and reliable Internet communications. SVN solutions, as delivered in the company's Next Generation product family, secure business communications and resources for corporate networks, remote employees, branch offices and partner extranets. Extending the power of SVN is Check Point's Open Platform for Security (OPSEC), the industry's framework and alliance for integration and interoperability with "best-of-breed" solutions from over 325 leading companies. Check Point solutions are sold, integrated and serviced by a network of 2,500 certified partners in 149 countries. For more information, please call us at (800) 429-4391 or (650) 628-2000 or visit us on the Web at http://www.checkpoint.com or at http://www.opsec.com.
###
Safe Harbor Statement
Certain statements in this press release 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 Check Point's current expectations. Factors that could cause or contribute to such differences include, but are not limited to: the impact on revenues of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism; the inclusion of network security functionality in third-party hardware or system software; any unforeseen developmental or technological difficulties with regard to Check Point's products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; a shift in demand for products such as Check Point's; unknown factors affecting third parties with which Check Point has formed business alliances; timely availability and customer acceptance of Check Point's new and existing products, and other factors and risks discussed in Check Point's Report on Form 20-F for the year ended December 31, 2001, which is on file with the Securities and Exchange Commission. Check Point assumes no obligation to update information concerning its expectations.
###
©2002 Check Point Software Technologies
Ltd.
All rights reserved. Check Point, the Check Point logo, ClusterXL, ConnectControl, FireWall-1, FireWall-1 GX, FireWall-1 SecureServer, FireWall-1 SmallOffice, FireWall-1 VSX, FireWall-1 XL, FloodGate-1, INSPECT, INSPECT XL, IQ Engine, Open Security Extension, OPSEC, Provider-1, SecureKnowledge, SecurePlatform, SecureXL, SiteManager-1, SmartCenter, SmartCenter Pro, SmartDashboard, SmartDefense, SmartLSM, SmartMap, SmartUpdate, SmartView, SmartView Monitor, SmartView Reporter, SmartView Status, SmartView Tracker, SVN, UAM, User-to-Address Mapping, UserAuthority, VPN-1, VPN-1 Accelerator Card, VPN-1 Net, VPN-1 Pro, VPN-1 SecureClient, VPN-1 SecuRemote, VPN-1 SecureServer, VPN-1 SmallOffice, and VPN-1 VSX are trademarks or registered trademarks of Check Point Software Technologies Ltd. or its affiliates. All other product names mentioned herein are trademarks or registered trademarks of their respective owners. The products described in this document are protected by U.S. Patent No. 5,606,668 and 5,835,726 and may be protected by other U.S. Patents, foreign patents, or pending applications.
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CHECK POINT SOFTWARE TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
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(In thousands, except per share amount) |
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Three
Months Ended |
Nine Months Ended
|
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September 30, |
September 30, |
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|
2002 |
2001 |
2002 |
2001 |
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 |
|
 |
|
|
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|
(unaudited) |
(audited) |
|||||
| Revenues |
$103,559 |
$118,032 |
$316,729 |
$405,113 |
||
| Cost of revenues |
5,676 |
5,368 |
15,180 |
21,910 |
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|
|
|
|
|
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| Gross profit |
97,883 |
112,664 |
301,549 |
383,203 |
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| Operating expenses: | ||||||
| Research and development |
6,988 |
7,511 |
21,770 |
25,880 |
||
| Sales and marketing |
24,625 |
23,500 |
77,523 |
82,596 |
||
| General and administrative |
4,215 |
4,877 |
13,416 |
17,560 |
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|
|
|
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| Total operating expenses |
35,828 |
35,888 |
112,709 |
126,036 |
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|
|
|
|
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| Operating income |
62,055 |
76,776 |
188,840 |
257,167 |
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| Financial & other income, net |
12,276 |
11,440 |
36,835 |
33,115 |
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|
|
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| Income before income taxes |
74,331 |
88,216 |
225,675 |
290,282 |
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| Income taxes |
12,015 |
13,911 |
35,089 |
45,498 |
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|
|
|
|
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| Net income |
$62,316 |
$74,305 |
$190,586 |
$244,784 |
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| Earnings per share (Basic) |
$0.25 |
$0.31 |
$0.78 |
$1.03 |
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| Number of shares used in computing earnings per share (Basic) |
244,739 |
241,397 |
243,986 |
237,871 |
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|
|
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|
|
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| Earnings per share (Fully diluted) |
$0.25 |
$0.29 |
$0.75 |
$0.95 |
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|
|
|
||
|
|
|
|
|
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| Number of shares used in computing earnings per share (Fully diluted) |
253,336 |
259,124 |
255,311 |
257,739 |
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CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED CONSOLIDATED BALANCE SHEET DATA |
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(In thousands) ASSETS |
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September 30, |
December 31, |
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|
2002 |
2001 |
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|
|
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|
(Unaudited) |
(Audited) |
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Current
Assets: |
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|
Cash and cash equivalents, deposits and marketable securities |
$1,240,794 |
$1,028,317 |
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Trade receivables, net |
65,155 |
74,294 |
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Other receivables and prepaid expenses |
25,978 |
21,290 |
||
| Net property and equipment |
11,350 |
13,248 |
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| Deferred income taxes |
5,846 |
5,759 |
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Total
assets |
$1,349,123 |
$1,142,908 |
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LIABILITIES
AND SHAREHOLDERS' EQUITY |
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| Liabilities: | ||||
|
Deferred revenues |
$94,616 |
$95,703 |
||
|
Trade payables and other accrued liabilities |
133,420 |
131,477 |
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|
|
|
|
|
Total current liabilities |
228,036 |
227,180 |
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|
|
|
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| Shareholders' Equity: | ||||
|
Share capital |
737 |
735 |
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|
Additional paid-in capital |
161,587 |
146,816 |
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|
Retained earnings |
958,763 |
768,177 |
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|
|
|
|
|
Total shareholders' equity |
1,121,087 |
915,728 |
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|
|
|
|
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| Total liabilities and shareholders' equity |
$1,349,123 |
$1,142,908 |
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