Check Point Software Technologies Reports Second Quarter Financial Results
REDWOOD CITY, Calif.
- July 21, 2003 - Check Point Software Technologies Ltd.
(Nasdaq: CHKP), the worldwide leader in securing the Internet, today
announced its financial results for the second quarter ended June
30, 2003.
Revenues for the second quarter were $106.1 million, compared to
$104.8 million for the quarter ended March 31, 2003. Deferred revenues
increased from $101.7 to $103.3 million in the second quarter. Net
income for the quarter was $60.2 million, or $0.24 per share (diluted),
compared to $60.1 million, or $0.24 per share (diluted) for the
quarter ended March 31, 2003. During the second quarter, the company
generated net cash flow of $73.1 million, bringing total cash and
interest bearing investments as of June 30, 2003 to nearly $1.5
billion.
"We are pleased with our results this quarter, particularly
with the strength we saw in the U.S. market, as well as the acceptance
of the newest version of our NG product," said Gil Shwed, chairman
and chief executive officer, Check Point Software Technologies.
"In addition to releasing NG with Application Intelligence,
we continued to expand into new and existing customer segments,
furthering our mission to deliver innovative solutions which make
Internet communications secure and available everywhere."
Recent news highlights included:
- Groundbreaking Application Intelligence Technology - unveiled Check Point NG with Application Intelligence™, the industry's only comprehensive, integrated solution to protect against both network and application level attacks. Check Point NG with Application Intelligence sets a new standard for protection against an increasingly sophisticated Internet threat environment. 6,000 copies have been shipped in the second quarter to prospects and existing customers.
- Check Point Partner Enhancements - began awarding new 'Platinum' Partner designation to partners who show the greatest expertise and success with Check Point solutions. Also launched a new partner web portal, PartnerMAP™, a one-stop site for Check Point information, delivering the business tools and market data Check Point partners need to grow their business.
- Industry Accolades
- Check Point VPN-1/FireWall-1, was awarded "Best Internet Security Solution" by SC Magazine in the 2003 SC Awards.
- Check Point Next Generation with Application Intelligence was named 'Best of Show' in the category of Enterprise Systems Defense by eWeek and PC Magazine at CeBIT America 2003.
"Looking ahead, we will continue to focus on customers' security needs," continued Mr. Shwed. "In the second half of the year, we will enhance our solutions portfolio for our three areas of focus - perimeter security, internal security and web security."
Conference Call Information
The Company will host a conference call with the investment community
on July 21, 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 August
6, 2003, at the Company's website or by telephone at (973)
341-3080, confirmation code 4013366.
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.
|
CHECK POINT SOFTWARE TECHNOLOGIES
LTD. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
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|
(In thousands, except per share amount) |
|||||||
|
Three Months Ended |
Six Months Ended |
||||||
|
June
30, 2003 |
March
31, 2003 |
June
30, 2002 |
June
30, 2003 |
June 30, 2002 |
|||
 |
|
 |
|
|
|||
|
(unaudited) |
(unaudited) |
||||||
| Revenues: | |||||||
|
Products |
$54,778 |
$58,254 |
$65,967 |
$113,032 |
$130,211 |
||
|
Subscriptions and upgrades |
40,751 |
36,895 |
32,553 |
77,646 |
62,191 |
||
|
Services |
10,574 |
9,698 |
10,067 |
20,272 |
20,768 |
||
|
|
|
|
|
|||
| Total revenues |
106,103 |
104,847 |
108,587 |
210,950 |
213,170 |
||
|
|
|
|
|
|||
| Operating expenses: | |||||||
| Cost of revenues |
4,621 |
5,113 |
4,889 |
9,734 |
9,504 |
||
| Research and development |
7,263 |
6,858 |
7,383 |
14,121 |
14,782 |
||
| Sales and marketing |
26,768 |
26,688 |
27,865 |
53,456 |
52,898 |
||
| General and administrative |
4,581 |
4,344 |
4,364 |
8,925 |
9,201 |
||
|
|
|
|
|
|||
| Total operating expenses |
43,233 |
43,003 |
44,501 |
86,236 |
86,385 |
||
|
|
|
|
|
|||
| Operating income |
62,870 |
61,844 |
64,086 |
124,714 |
126,785 |
||
| Financial income, net |
10,497 |
11,343 |
12,332 |
21,840 |
24,559 |
||
|
|
|
|
|
|||
| Income before income taxes |
73,367 |
73,187 |
76,418 |
146,554 |
151,344 |
||
| Income taxes |
13,189 |
13,108 |
11,684 |
26,297 |
23,074 |
||
|
|
|
|
|
|||
| Net income |
$60,178 |
$60,079 |
$64,734 |
$120,257 |
$128,270 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Earnings per share (basic) |
$0.24 |
$0.24 |
$0.27 |
$0.49 |
$0.53 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Number of shares used in computing earnings per share (basic) |
247,221 |
246,255 |
243,740 |
246,738 |
243,673 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Earnings per share (fully diluted) |
$0.24 |
$0.24 |
$0.26 |
$0.47 |
$0.50 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Number of shares used in computing earnings per share (fully diluted) |
255,199 |
253,195 |
253,559 |
254,197 |
256,279 |
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|
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CHECK POINT SOFTWARE TECHNOLOGIES
LTD. SELECTED CONSOLIDATED BALANCE SHEET DATA |
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|
(In thousands) ASSETS |
||||
|
June
30, 2003 |
December
31, 2002 |
|||
|
|
|
|
|
| (unaudited) | (audited) | |||
|
Assets: |
||||
|
Cash and cash equivalents, deposits and marketable
securities |
$1,467,333 |
$1,314,752 |
||
|
Trade receivables, net |
61,287 |
73,165 |
||
|
Other receivables and prepaid expenses |
20,243 |
18,354 |
||
| Property and equipment, net |
8,649 |
10,453 |
||
| Deferred income taxes |
5,053 |
4,963 |
||
|
Total assets |
$1,562,565 |
$1,421,687 |
||
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
||||
| Liabilities: | ||||
|
Deferred revenues |
$103,314 |
$99,227 |
||
|
Trade payables and other accrued liabilities |
133,533 |
135,418 |
||
|
|
|
|
|
|
Total liabilities |
236,847 |
234,645 |
||
|
|
|
|
|
| Shareholders' Equity: | ||||
|
Share capital |
744 |
740 |
||
|
Additional paid-in capital |
181,460 |
163,045 |
||
|
Retained earnings |
1,143,514 |
1,023,257 |
||
|
|
|
|
|
|
Total shareholders' equity |
1,325,718 |
1,187,042 |
||
|
|
|
|
|
| Total liabilities and shareholders' equity |
$1,562,565 |
$1,421,687 |
||
|
|
|
|
|
|
|
|
|
|
|
CHECK POINT SOFTWARE TECHNOLOGIES
LTD. SELECTED CONSOLIDATED CASH FLOW DATA |
||||||
|
(In thousands) |
||||||
|
Three Months Ended |
Six Months Ended |
|||||
|
June
30, 2003 |
June
30, 2002 |
June
30, 2003 |
June
30, 2002 |
|||
|
|
|
|
|
||
|
(unaudited) |
(unaudited) |
|||||
| Cash flow from operating activities: | ||||||
| Net income |
$60,178 |
$64,734 |
$120,257 |
$128,270 |
||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization |
1,400 |
3,055 |
2,997 |
4,831 |
||
|
(2,395) |
2,249 |
10,372 |
12,285 |
||
|
6,052 |
3,870 |
2,203 |
1,997 |
||
|
2,416 |
620 |
8,773 |
1,756 |
||
|
|
|
|
|
||
| Net cash provided by operating activities |
67,651 |
74,528 |
144,602 |
149,139 |
||
|
|
|
|
|
||
| Net cash invested in property and equipment |
(997) |
(1,318) |
(1,634) |
(2,443) |
||
|
|
|
|
|
||
| Net cash provided by issuance of shares upon exercise of options |
6,447 |
2,423 |
9,613 |
7,348 |
||
|
|
|
|
|
||
| Increase in cash and cash equivalents, deposits and marketable securities |
73,101 |
75,633 |
152,581 |
154,044 |
||
| Cash and cash equivalents,
deposits and marketable securities at the beginning of the period |
1,394,232 |
1,106,728 |
1,314,752 |
1,028,317 |
||
|
|
|
|
|
||
| Cash and cash equivalents,
deposits and marketable securities at the end of the period |
$1,467,333 |
$1,182,361 |
$1,467,333 |
$1,182,361 |
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