Check Point Software Technologies Reports First Quarter Financial Results
REDWOOD CITY, Calif.
- April 15, 2003 - Check Point Software Technologies Ltd.
(Nasdaq: CHKP), the worldwide leader in securing the Internet, today
announced its financial results for the first quarter ended March
31, 2003.
Net income for the quarter was $60.1 million, or $0.24 per share
(diluted) and revenues were $104.8 million. Deferred revenues increased
by $2.5 million in the quarter to a total of $101.7 million. During
the first quarter, the company generated net cash flow of $79.5
million, bringing total cash and interest bearing investments as
of March 31, 2003 to $1.4 billion.
"We are pleased with our first quarter results," said
Gil Shwed, chairman and chief executive officer. "We continued
to lead and gain a competitive advantage in the Internet security
market, as well as take a leading position in some new customer
segments. Our latest successes in the high-end appliance and small
business segments demonstrate customer demand for best-of-breed
security from a proven industry innovator. Check Point's success
has been powered by our ability to meet our customers' evolving
needs and deliver high-quality, innovative solutions."
Recent news highlights included:
Increased High-end Capabilities
- #1 Market Share for VPN/firewall High-end Appliances - Prevailed over competitors to take the leading position with 32% share for combined "Secured by Check Point" appliance partners (Infonetics 2002).
- Demonstrated Security Performance Leadership - Enabled nearly 3 Gbps VPN/firewall performance with the SecureXL Turbocard, jointly developed with partners Corrent and IBM.
- Virtualized Systems Security - Launched version 2.0 of Check Point VPN-1/FireWall-1 VSX, running up to 250 virtual systems on one hardware platform for new levels of scalability and convenience for high-end customers.
Small Business Milestones
- Gained #1 Market Share Position for Small Business - Rose to leading position for sub-$490 appliances with 38% market share from combined "Secured by Check Point" Safe@ based security appliances from SofaWare and partners Nokia, Celestix, Intrusion Inc. and VPN Dynamics (Infonetics 2002).
- Launched Small Business Channel Partner Program - Unveiled program to enable Solution Providers to deliver Check Point Safe@ products to their small business customers with easy-to-use, affordable solutions, thus expanding the Check Point channel and reach into this new market.
Industry Accolades
- Check Point FireWall-1 received the prestigious Information Security magazine 2003 Excellence Award.
- Nokia VPN appliances running Check Point VPN-1 was awarded Information Security magazines' 2003 Excellence Award.
"Check Point has executed well on its
strategic initiatives to meet the ever-challenging security and
connectivity needs for our customers," continued Mr. Shwed.
"We continue to take an open approach, allowing customers to
deploy on open platforms such as Windows, Unix and Linux, numerous
appliance platforms from our partners, and integrate solutions from
over 350 OPSEC partners. This results in solutions which meet customer's
price, performance, security and connectivity needs. No other company
can offer such a broad range of security choices to customers."
Conference Call Information
The Company will host a conference call with the investment community
on April 15, 2003 at 8:30 AM ET/5:30 AM PT. To listen to the live
webcast, please visit Check Point's web site at www.checkpoint.com/ir.
A replay of the conference call will be available through April
29, 2003, at the Company's website or by telephone at (973)
341-3080, confirmation code 3837445.
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, 2002, which
is on file with the Securities and Exchange Commission. Check Point
assumes no obligation to update information concerning its expectations.
About Check Point Software Technologies
Check Point Software Technologies is the worldwide leader in securing
the Internet. It is the confirmed market leader of 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 350 leading companies.
Check Point solutions are sold, integrated and serviced by a network
of 2,500 Check Point 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.
###
©2003 Check Point Software Technologies
Ltd.
Check Point, the Check Point logo, Cluster XL, 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, Meta IP, MultiGate, Open Security Extension, OPSEC, Provider-1,
SecureKnowledge, SecureXL, SiteManager-1, SmartCenter, SmartCenter
Pro, SmartDashboard, SmartDefense, SmartLSM, SmartMap, SmartView,
SmartView Monitor, SmartView Reporter, SmartView Status, SmartView
Tracker, SVN, UAM, User-to-Address Mapping, UserAuthority, 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, service marks, 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.
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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 March 31, |
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| Revenues: | ||||
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Products |
$58,254 |
$64,244 |
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Subscriptions and upgrades |
36,895 |
29,638 |
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Services |
9,698 |
10,701 |
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| Total revenues |
104,847 |
104,583 |
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| Operating expenses: | ||||
| Cost of revenues |
5,113 |
4,615 |
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| Research and development |
6,858 |
7,399 |
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| Sales and marketing |
26,688 |
25,033 |
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| General and administrative |
4,344 |
4,837 |
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| Total operating expenses |
43,003 |
41,884 |
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| Operating income |
61,844 |
62,699 |
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| Financial income, net |
11,343 |
12,227 |
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| Income before income taxes |
73,187 |
74,926 |
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| Income taxes |
13,108 |
11,390 |
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| Net income |
$60,079 |
$63,536 |
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| Earnings per share (basic) |
$0.24 |
$0.26 |
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| Number of shares used in computing earnings per share (basic) |
246,255 |
243,179 |
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| Earnings per share (fully diluted) |
$0.24 |
$0.25 |
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| Number of shares used in computing earnings per share (fully diluted) |
253,195 |
259,042 |
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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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March 31, 2003 |
December 31, 2002 |
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(unaudited) |
(audited) |
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Assets: |
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Cash and cash equivalents, deposits and marketable
securities |
$1,394,232 |
$1,314,752 |
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Trade receivables, net |
59,083 |
73,165 |
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Other receivables and prepaid expenses |
19,854 |
18,354 |
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| Property and equipment, net |
9,494 |
10,453 |
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| Deferred income taxes |
5,025 |
4,963 |
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Total assets |
$1,487,688 |
$1,421,687 |
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LIABILITIES AND SHAREHOLDERS'
EQUITY |
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| Liabilities: | ||||
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Deferred revenues |
$101,717 |
$99,227 |
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Trade payables and other accrued liabilities |
129,078 |
135,418 |
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Total liabilities |
230,795 |
234,645 |
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| Shareholders' Equity: | ||||
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Share capital |
741 |
740 |
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Additional paid-in capital |
172,816 |
163,045 |
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Retained earnings |
1,083,336 |
1,023,257 |
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Total shareholders' equity |
1,256,893 |
1,187,042 |
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| Total liabilities and shareholders' equity |
$1,487,688 |
$1,421,687 |
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CHECK POINT SOFTWARE TECHNOLOGIES
LTD. SELECTED CONSOLIDATED CASH FLOW DATA |
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(In thousands) |
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Three Months Ended March 31, |
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2003 |
2002 |
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(unaudited) |
(unaudited) |
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| Cash flow from operating activities: | ||||
| Net income |
$60,079 |
$63,536 |
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| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization |
1,597 |
1,776 |
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|
12,766 |
10,036 |
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(3,849) |
(1,873) |
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6,358 |
1,136 |
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| Net cash provided by operating activities |
76,951 |
74,611 |
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| Net cash invested in property and equipment |
(637) |
(1,125) |
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| Net cash provided by issuance of shares upon exercise of options |
3,166 |
4,925 |
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| Increase in cash and cash equivalents, deposits and marketable securities |
79,480 |
78,411 |
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| Cash and cash equivalents,
deposits and marketable securities at the beginning of the period |
1,314,752 |
1,028,317 |
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| Cash and cash equivalents,
deposits and marketable securities at the end of the period |
1,394,232 |
1,106,728 |
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