Check Point Software Technologies Reports Third Quarter Financial Results
REDWOOD CITY, Calif.,
- October 20, 2003 - 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, 2003.
Revenues for the third quarter were $106.3 million, compared to
$103.6 million for the same period last year. Operating income was
$62.1 million, same as in the third quarter of 2002.
Earnings per share (diluted) were $0.23 compared to $0.25 in the same period last year. The change resulted from an increase in taxes and shares outstanding as well as a reduction in financial income. During the quarter, the company generated net cash flow of $62.8 million, bringing the total cash and interest bearing investments as of September 30, 2003 to over $1.5 billion.
"I am pleased with our financial results and especially with the increased revenues we generated in the third quarter," said Gil Shwed, chairman and chief executive officer of Check Point Software Technologies. "During the third quarter we've continued to expand and execute on our strategy. In particular, we're pleased with the recent introduction of the industry's most secure solutions for small businesses, mid-size businesses, remote offices and large scale VPNs. Our enterprise flagship product family, NG with Application Intelligence, continued to set the bar for Internet security, and successfully blocked the flood of Internet attacks experienced this summer."
Recent news highlights included:
Expanded Perimeter Security Solutions Portfolio
- Launched Check Point Express™, new solutions tailored for the price and performance needs of medium-sized businesses.
- Introduced VPN-1 Edge™ product family for securing remote sites and deploying large scale VPNs with ease, efficiency and affordability.
- Unveiled new small business product line, called Safe@Office and designed especially for small businesses, that delivers proven Internet security. Starting at $299, Safe@Office can be self-managed out of the box or outsourced to a Service Provider who can easily manage tens of thousands with our Security Management Portal (SMP).
- SmartDefense Defeats Attacks - Check Point SmartDefense protected customers against the recent slew of cyber attacks such as Blaster, LovSan and subsequent Microsoft RPC vulnerabilities.
Industry Accolades - Users and sellers of Check Point technology awarded the company with the following:
- Windows & .NET Magazine Readers'
Choice award recognized VPN-1® and
FireWall-1® as the Best Security Product. - Check Point security professional certifications recognized for garnering solution providers the best return on investment (ROI) in CRN's 2003 Certification Study.
- CRN Magazine recognized Check Point Chairman & CEO Gil Shwed as a Top Innovator for his contribution to and development of Internet security.
- Forbes Magazine named Check Point as "Best of the Web" in its annual Forbes.com B2B guide, describing Check Point as "The gold standard for firewall".
"In the last few months we've expanded and streamlined our perimeter security solutions," Shwed continued. "In the coming months, we plan to continue our expansion and come up with exciting new solutions for Internal security and Web security."
Conference Call Information
The company will host a conference call with the investment community
on October 20, 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 November
3, 2003 at the Company's website or by telephone at 973-341-3080,
confirmation code 4224673.
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. Through its Next Generation product line,
the company delivers a broad range of Perimeter, Internal and Web
security solutions that protect business communications and resources
for corporate networks and applications, remote employees, branch
offices and partner extranets. Extending the power of the Check
Point solution is its 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 1,900 Check Point partners in 86 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. All rights reserved.
Check Point, the Check Point logo, Application Intelligence, Check
Point Express, 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 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 |
Nine Months Ended |
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September 30, |
September 30, |
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2003 |
2002 |
2003 |
2002 |
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 |
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(unaudited) |
(unaudited) |
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| Revenues: | ||||||
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Products |
$54,042 | $60,424 | $167,074 | $190,635 | ||
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Subscriptions and upgrades |
41,566 | 33,362 | 119,212 | 95,553 | ||
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Services |
10,714 | 9,773 | 30,986 | 30,541 | ||
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| Total revenues | $106,322 | $103,559 | $317,272 | $316,729 | ||
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| Operating expenses: | ||||||
| Cost of revenues | 4,597 | 5,676 | 14,331 | 15,180 | ||
| Research and development | 7,670 | 6,988 | 21,791 | 21,770 | ||
| Sales and marketing | 27,598 | 24,625 | 81,054 | 77,523 | ||
| General and administrative | 4,369 | 4,215 | 13,294 | 13,416 | ||
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| Total operating expenses | 44,234 | 41,504 | 130,470 | 127,889 | ||
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| Operating income | 62,088 | 62,055 | 186,802 | 188,840 | ||
| Financial income, net | 10,921 | 12,276 | 32,761 | 36,835 | ||
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| Income before income taxes | 73,009 | 74,331 | 219,563 | 225,675 | ||
| Income taxes | 14,643 | 12,015 | 40,940 | 35,089 | ||
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| Net income | $58,366 | $62,316 | $178,623 | $190,586 | ||
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| Earnings per share (basic) | $0.24 | $0.25 | $0.72 | $0.78 | ||
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| Number of shares used in computing earnings per share (basic) | 248,172 | 244,739 | 247,216 | 243,986 | ||
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| Earnings per share (fully diluted) | $0.23 | $0.25 | $0.70 | $0.75 | ||
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| Number of shares used in computing earnings per share (fully diluted) | 256,106 | 253,336 | 254,833 | 255,311 | ||
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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, 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 |
$1,530,128 | $1,314,752 | ||
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Trade receivables, net |
57,541 | 73,165 | ||
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Other receivables and prepaid expenses |
25,448 | 18,354 | ||
| Property and equipment, net | 8,019 | 10,453 | ||
| Deferred income taxes | 5,044 | 4,963 | ||
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Total assets |
$1,626,180 | $1,421,687 | ||
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LIABILITIES AND SHAREHOLDERS'
EQUITY |
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| Liabilities: | ||||
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Deferred revenues |
$99,137 | $99,227 | ||
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Trade payables and other accrued liabilities |
135,154 | 135,418 | ||
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Total liabilities |
234,291 |
234,645 |
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| Shareholders' Equity: | ||||
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Share capital |
745 | 740 | ||
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Additional paid-in capital |
189,264 | 163,045 | ||
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Retained earnings |
1,201,880 | 1,023,257 | ||
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Total shareholders' equity |
1,391,889 |
1,187,042 |
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| Total liabilities and shareholders' equity |
$1,626,180 |
$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 |
Nine Months Ended |
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September 30, |
September 30, |
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2003 |
2002 |
2003 |
2002 |
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(unaudited) |
(unaudited) |
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| Cash flow from operating activities: | ||||||
| Net income | $58,366 | $62,316 | $178,623 | $190,586 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization |
1,343 | 673 | 4,340 | 5,504 | ||
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(1,342) | (7,551) | 9,030 | 4,733 | ||
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(2,556) | (1,137) | (354) | 860 | ||
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2,594 | 1,039 | 11,368 | 2,796 | ||
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| Net cash provided by operating activities | 58,405 | 55,340 | 203,007 | 204,479 | ||
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| Net cash invested in property and equipment | (713) | (1,163) | (2,347) | (3,606) | ||
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| Net cash provided by issuance of shares upon exercise of options | 5,103 | 4,256 | 14,716 | 11,604 | ||
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| Increase in cash and cash equivalents, deposits and marketable securities | 62,795 | 58,433 | 215,376 | 212,477 | ||
| Cash and cash equivalents,
deposits and marketable securities at the beginning of the period |
1,467,333 | 1,182,361 | 1,314,752 | 1,028,317 | ||
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| Cash and cash equivalents,
deposits and marketable securities at the end of the period |
$1,530,128 | $1,240,794 | $1,530,128 | $1,240,794 | ||
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