Check Point Software Technologies Reports Fourth Quarter and Year-End Financial Results
REDWOOD CITY, Calif., - January 22, 2004 - Check Point Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced its financial results for the fourth quarter and year ended December 31, 2003.
Revenues for the fourth quarter were $115.3 million, compared to $106.3 million in the previous quarter, a sequential increase of 8%. Net income was $65.3 million, compared to $58.4 million in the previous quarter, a sequential increase of 12%. Earnings per share were $0.26, compared to $0.23 in the previous quarter, a sequential increase of 13%. During the fourth quarter, the company generated net cash flow of $72.6 million, bringing total net cash flow for the year to $288 million.
For the year ended December 31, 2003, revenues were $432.6 million, compared to $427 million for the year ended December 31, 2002. Net income was $243.9 million, or $0.96 per share, compared to $255.1 million, or $1.00 per share for the year ended December 31, 2002. Total cash and interest bearing investments as of December 31, 2003 was $1.6 billion, compared to $1.3 billion as of December 31, 2002.
"A strong fourth quarter marked the end of an active year filled with numerous product and technology introductions," said Gil Shwed, Chairman and CEO of Check Point Software Technologies. "In 2003, we launched groundbreaking Application Intelligence technology and brand new solutions, forged new partnerships, and announced plans to acquire Zone Labs, the most trusted provider of endpoint security solutions - expanding Check Point's industry leading perimeter, internal and Web security solutions to new and existing customers. And, we have already begun to execute on our internal security strategy with the introduction on January 20, 2004 of InterSpect, the world's first internal security gateway to protect internal corporate networks and applications."
Highlights during 2003 included:
- Groundbreaking New Technology - introduced Next Generation™ with Application Intelligence™, the industry's deepest and most intelligent Internet security and the first comprehensive, integrated solution to protect both networks and applications from attacks.
- New Solutions for:
- Mid-Size Businesses - introduced Check Point Express, delivering comprehensive, worry-free security protection tailored specifically for the needs of the mid-sized business.
- Small Businesses - introduced new series of Safe@Office™ appliances, enabling simple, cost-effective and proven security for small businesses.
- Remote Sites/Branch Offices - introduced VPN-1 Edge™ appliance, tailored specifically to provide secure connectivity for remote sites and easy deployment of large-scale VPNs.
- Market/Business Expansion:
- Zone Labs® Acquisition - announced agreement to acquire the industry-leading provider of end-point security. This acquisition will enable Check Point to take advantage of this fast-growing market segment and deliver the industry's most comprehensive end-to-end Internet security to all types of customers - from consumers to the largest enterprises.
- Recognition for Check Point Leadership
in Technology and Innovation:
- Windows and .NET magazine readers voted Check Point solutions best in the industry
- SC magazine named Check Point VPN-1®/FireWall-1® "Best Internet Security Solution"
- Information Security magazine honored Check Point FireWall-1 with prestigious "Excellence" award
- Check Point NG with Application Intelligence garnered "Best in Show" at CeBIT America
- CRN Magazine survey ranked Check Point certifications among the best in the industry for return on investment
- Forbes magazine recognized Check Point's technology and website with a "Best of Web" award
- CRN magazine named Check Point CEO Gil Shwed a top innovator
Mr. Shwed continued: "I'm very proud of our achievements in 2003. We've delivered solid results and high profitability, while expanding our strategy from perimeter security to include internal and Web security. We're committed to providing the industry's most intelligent solutions for addressing dynamic and evolving Internet security challenges. In 2004, we will continue to launch new products and technologies that raise the bar and enable our customers to solve more of their security challenges."
Conference Call and
Webcast Information
Check Point will host a conference call with the investment community
on January 22, 2004 at 5:30 AM PT/8:30 AM ET. A replay of the conference
call will be available through February 5 at the Company's website http://www.checkpoint.com/ir or by telephone at 973-341-3080, confirmation code 4388172.
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 more than 2,300 Check Point Partners in 92 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.
###
©2004 Check Point Software Technologies
Ltd.
All rights reserved. Check Point, Check Point Express, the Check
Point logo, ClusterXL, ConnectControl, FireWall-1, FireWall-1 GX,
FireWall-1 SecureServer, FireWall-1 XL, FloodGate-1, INSPECT, INSPECT
XL, InterSpect, IQ Engine, Open Security Extension, OPSEC, Provider-1,
Safe@Office, SecureKnowledge, SecurePlatform, SecureXL, SiteManager-1,
SmartCenter, SmartCenter Pro, SmartDashboard, SmartDefense, SmartLSM,
SmartMap, SmartUpdate, SmartView, SmartView Monitor, SmartView Reporter,
SmartView Status, SmartViewTracker, UAM, User-to-Address Mapping,
UserAuthority, VPN-1, VPN-1 Accelerator Card, VPN-1 Edge, VPN-1
Pro, VPN-1 SecureClient, VPN-1 SecuRemote, VPN-1 SecureServer, ,
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 |
|||||||
|
(In thousands, except per share amount) |
|||||||
|
Three Months Ended |
Year Ended |
||||||
|
December 31, 2003 |
September 30, 2003 |
December 31, 2002 |
December 31, 2003 |
December 31, 2002 |
|||
 |
|
 |
|
|
|||
|
(unaudited) |
(unaudited) |
||||||
| Revenues: | |||||||
|
Products |
63,022 |
54,042 |
65,478 |
230,096 |
256,113 |
||
|
Subscriptions and upgrades |
42,478 |
41,566 |
35,326 |
161,690 |
130,879 |
||
|
Services |
9,800 |
10,714 |
9,456 |
40,786 |
39,997 |
||
|
|
|
|
|
|||
| Total revenues |
$115,300 |
$106,322 |
$110,260 |
$432,572 |
$426,989 |
||
|
|
|
|
|
|||
| Operating expenses: | |||||||
| Cost of revenues |
4,592 |
4,597 |
5,513 |
18,923 |
20,693 |
||
| Research and development |
7,523 |
7,670 |
6,939 |
29,314 |
28,709 |
||
| Sales and marketing |
29,953 |
27,598 |
27,083 |
111,007 |
104,606 |
||
| General and administrative |
4,350 |
4,369 |
4,553 |
17,644 |
17,969 |
||
|
|
|
|
|
|||
| Total operating expenses |
46,418 |
44,234 |
44,088 |
176,888 |
171,977 |
||
|
|
|
|
|
|||
| Operating income |
68,882 |
62,088 |
66,172 |
255,684 |
255,012 |
||
| Financial income, net |
10,745 |
10,921 |
12,479 |
43,506 |
49,314 |
||
|
|
|
|
|
|||
| Income before income taxes |
79,627 |
73,009 |
78,651 |
299,190 |
304,326 |
||
| Income taxes |
14,371 |
14,643 |
14,157 |
55,311 |
49,246 |
||
|
|
|
|
|
|||
| Net income |
$65,256 |
$58,366 |
$64,494 |
$243,879 |
$255,080 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Earnings per share (basic) |
$0.26 |
$0.24 |
$0.26 |
$0.98 |
$1.04 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Number of shares used in computing earnings per share (basic) |
248,945 |
248,172 |
245,503 |
247,691 |
244,097 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Earnings per share (fully diluted) |
$0.26 |
$0.23 |
$0.26 |
$0.96 |
$1.00 |
||
|
|
|
|
|
|||
|
|
|
|
|
|||
| Number of shares used in computing earnings per share (fully diluted) |
255,834 |
256,106 |
252,807 |
255,083 |
254,772 |
||
|
|
|
|
|
|||
|
|
|
|
|
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CHECK POINT SOFTWARE TECHNOLOGIES
LTD. SELECTED CONSOLIDATED BALANCE SHEET DATA |
||||
|
(In thousands) ASSETS |
||||
|
December 31, 2003 |
December 31, 2002 |
|||
|
|
|
|
|
|
(unaudited) |
||||
|
Assets: |
||||
|
Cash and cash equivalents, deposits and marketable
securities |
$1,602,724 |
$1,314,752 |
||
|
Trade receivables, net |
72,754 |
73,165 |
||
|
Other receivables and prepaid expenses |
20,553 |
18,354 |
||
| Property and equipment, net |
7,394 |
10,453 |
||
| Deferred income taxes |
5,519 |
4,963 |
||
|
|
|
|
|
|
Total assets |
$1,708,944 |
$1,421,687 |
||
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
||||
| Liabilities: | ||||
|
Deferred revenues |
$105,889 |
$99,227 |
||
|
Trade payables and other accrued liabilities |
141,510 |
135,418 |
||
|
|
|
|
|
|
Total liabilities |
247,399 |
234,645 |
||
|
|
|
|
|
| Shareholders' Equity: | ||||
|
Share capital |
747 |
740 |
||
|
Additional paid-in capital |
193,662 |
163,045 |
||
|
Retained earnings |
1,267,136 |
1,023,257 |
||
|
|
|
|
|
|
Total shareholders' equity |
1,461,545 |
1,187,042 |
||
|
|
|
|
|
| Total liabilities and shareholders' equity |
$1,708,944 |
$1,421,687 |
||
|
|
|
|
|
|
|
|
|
|
|
CHECK POINT SOFTWARE TECHNOLOGIES
LTD. SELECTED CONSOLIDATED CASH FLOW DATA |
|||||||
|
(In thousands) |
|||||||
|
Three Months Ended |
Year Ended |
||||||
|
December 31, 2003 |
September 30, 2003 |
December 31, 2002 |
December 31, 2003 |
December 31, 2002 |
|||
|
|
|
|
|
|||
|
(unaudited) |
(unaudited) |
||||||
| Cash flow from operating activities: | |||||||
| Net income |
$65,256 |
$58,366 |
$64,494 |
$243,879 |
$255,080 |
||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization |
1,250 |
1,343 |
1,887 |
5,590 |
7,390 |
||
|
(10,470) |
(1,342) |
(3,767) |
(1,440) |
968 |
||
|
13,108 |
(2,556) |
6,604 |
12,754 |
7,464 |
||
|
1,083 |
2,594 |
2,597 |
12,450 |
5,393 |
||
|
|
|
|
|
|||
| Net cash provided by operating activities |
70,227 |
58,405 |
71,815 |
273,233 |
276,295 |
||
|
|
|
|
|
|||
| Net cash invested in property and equipment |
(625) |
(713) |
(990) |
(2,971) |
(4,596) |
||
|
|
|
|
|
|||
| Net cash provided by issuance of shares upon exercise of options |
2,994 |
5,103 |
3,133 |
17,710 |
14,736 |
||
|
|
|
|
|
|||
| Increase in cash and cash equivalents, deposits and marketable securities |
72,596 |
62,795 |
73,958 |
287,972 |
286,435 |
||
| Cash and cash equivalents, deposits and marketable securities at the beginning of the period |
1,530,128 |
1,467,333 |
1,240,794 |
1,314,752 |
1,028,317 |
||
|
|
|
|
|
|||
| Cash and cash equivalents, deposits and marketable securities at the end of the period |
$1,602,724 |
$1,530,128 |
$1,314,752 |
$1,602,724 |
$1,314,752 |
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