Check Point(R) 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, 2005. "Check Point's fourth quarter business provided a strong
finish to the year 2005," said Gil Shwed, chairman and chief
executive officer of Check Point Software. "Our fourth quarter and
annual 2005 financial results reached record levels across earnings
per share, revenues, deferred revenues, and cash balances."
Financial Highlights for the Fourth Quarter of 2005: -- Revenues:
$156.1 million, an increase of 9% compared to $143.0 million in the
fourth quarter of 2004. -- Net Income: $89.2 million, an increase
of 17% compared to $76.4 million in the fourth quarter of 2004. Net
income excluding acquisition related charges(1) was $90.9 million,
an increase of 15% compared to $78.7 million in the fourth quarter
of 2004. -- Earnings per Diluted Share: $0.36, an increase of 21%
compared to $0.30 in the fourth quarter of 2004. EPS excluding net
acquisition related charges was $0.37, an increase of 20% compared
to $0.31 in the fourth quarter of 2004. -- Deferred Revenues:
$169.0 million, an increase of $24.7 million or 17% over deferred
revenues as of September 30, 2005. -- Share Repurchase Program:
During the fourth quarter of 2005, Check Point purchased 1.25
million shares at a total cost of approximately $27.5 million. In
2005, the company purchased a total of 10.6 million shares for a
total cost of $237 million. Financial Highlights for the Year Ended
December 31, 2005: -- Revenues: $579.4 million, an increase of 12%
compared to $515.4 million for the year ended December 31, 2004. --
Net Income: $319.7 million, an increase of 29% compared to $248.4
million for the year ended December 31, 2004. Net income excluding
acquisition related charges was $326.9 million, an increase of 17%
compared to $278.7 million for the year ended December 31, 2004. --
Earnings per Diluted Share: $1.27, an increase of 33% compared to
$0.95 for the year ended December 31, 2004. EPS excluding net
acquisition related charges was $1.30, an increase of 21% compared
to $1.07 for the year ended December 31, 2004. -- Cash and
Investments Balance: $1.74 billion as of December 31, 2005. During
the year, Check Point introduced many products and technologies, as
well as continued to expand and unify the portfolio of security
solutions. The company also garnered many awards. Key business
highlights, product introductions and accolades include the
following: Business Highlights and Introductions during 2005 --
Expanded Industry's only Unified Security Architecture -- In 2005,
Check Point launched the NGX(TM) platform, a major upgrade to Check
Point's core technology. It is the unified security platform for
perimeter, internal and Web security solutions enabling enterprises
of all sizes to reduce the cost and complexity of security and
ensure that their security systems can be easily extended to adapt
to new and evolving threats. -- Internal Security, Intrusion
Prevention & Web Security -- During the year we have seen
strong growth in our Web-security and SSL VPN product family,
Connectra(TM), with revenue growth of over 250% for the year. We
have also expanded our internal security family, InterSpect(TM),
that combines active intrusion prevention, network zone
segmentation and quarantine capabilities. We look forward to
enhancing our technology with the pending acquisition of
Sourcefire, Inc. A definitive agreement was reached in October
2005. We have received US anti-trust approval and we are waiting
for a determination on our pending application with the Committee
on Foreign Investment in the U.S. (CFIUS). -- New Product Family
for Security Event Management, Eventia(TM) -- In early 2005, Check
Point introduced the new Eventia(TM) family that allows IT
professionals to collect, analyze, correlate and report on security
events, and enables a higher level of intelligence and protection
of the network security. -- Introduced New Unified Threat
Management (UTM) Solutions: Check Point Express CI(TM) and
Safe@Office(R) 500 appliance series -- Check Point has entered the
market for Unified Threat Management Solutions gateways that
include in a single product integrated firewall, VPN, antivirus,
intrusion prevention and many other security technologies. These
two product families enable affordable security for small and
medium businesses ranging from $400 to $15,000 per gateway. --
Expanded Endpoint Security for Consumers and Enterprises --
ZoneAlarm(R) 6.0 provides new multi-layered security for consumers
and debuted with a new OSFirewall(TM) and Anti-Spyware solution to
prevent the most dangerous Internet threats including spyware,
rootkits, viruses, and more from invading PCs. Integrity(TM)
delivers the most complete endpoint security solution, including
intrusion prevention, outbound threat protection, access policy
enforcement, advanced server and policy automation, to proactively
protect PCs and enterprise networks from the newest worms, viruses,
spyware, and hacker attacks. Partial List of Awards & Industry
Recognitions in 2005: Recognition by Industry Analyst Firms: --
Tolly Group Tests Confirm Check Point Solution Completeness and
Lowest TCO -- Tests by the Tolly Group confirmed that Check Point
provides the broadest breadth of security coverage at the lowest
Total Cost of Ownership (TCO) for today's complex security
vulnerabilities in comparison to competing solutions from Cisco and
Juniper. -- Gartner Group Prestigious Magic Quadrant(TM) Report
Leader -- Check Point positioned in the leader quadrant of
Gartner's Magic Quadrant for Network Firewalls. This report
evaluates both network and application firewall vendors on their
ability to execute and completeness of vision. -- META Group
Industry Leader Position in METAspectrum(TM) Report -- Check Point
was ranked as a market leader in META Group's METAspectrum report
on Network Intrusion Control Systems. Of 12 vendors, Check Point
ranked the highest for "performance" -- a category that measures
the company's technology, services pricing and financial standing.
-- Frost & Sullivan Global Market Leadership for Endpoint
Security Solutions -- Check Point, achieved prestigious recognition
from Frost & Sullivan that bestowed Check Point Integrity(TM)
endpoint security solution with their renowned Global Market
Leadership Award for outstanding market share, revenue growth rate,
profitability and market and technology innovation. Awards and
Recognition for Check Point's Partner Program: CMP's VARBusiness
Magazine: -- Top Channel Executive: Kevin Maloney, Vice President,
Worldwide Sales -- Five-Star Rating: Check Point Valued Partner
Program -- 2005 Annual Report Card: Check Point Achieves
Exceptional Partner Satisfaction Computer Reseller News (UK): --
Security Vendor Partner of the Year Awards for Products &
Technology: Check Point VPN-1(R) Pro: the industry's most proven
and secure VPN -- 2005 Global Best Enterprise Security Solution and
Best Firewall -- SC Magazine -- Editor's Choice -- China
Information World -- Best Firewall/VPN -- Computerworld Hong Kong
-- Readers Choice, Best Firewall -- Computerworld Malaysia,
Computerworld Singapore -- Best Firewall -- Relatorio Bancario,
Brazil -- Readers' Choice, Best Server/Standalone Firewall --
Windows IT Pro ZoneAlarm(R) Security Suite: complete internet
protection for consumers -- 2005 Global and European Best SOHO
Security Solution -- SC Magazine, SC Magazine (UK) -- 2005 Readers'
Choice, Best Desktop Firewall -- Windows IT Pro -- Editors' Choice,
Desktop Security -- CNet -- Editors' Choice, Best Security Suite --
PC Magazine -- Editor's Choice, Best Security Suite -- LAPTOP
Magazine Check Point Integrity(TM): complete solution for securing
internal-network endpoint PCs -- 2005 European Best Enterprise
Security Solution -- SC Magazine -- Endpoint Security Evaluation
Winner -- Information Security Magazine Unified Threat Management
(UTM) Solutions for Small and Mid-Size Businesses -- Midmarket
Product of The Year, Check Point Express CI(TM) -- VARBusiness --
Editor's Choice, Safe@Office -- InformationWeek -- Excellent
Security, Safe@Office -- ProtectStar, Germany Mr. Shwed continued,
"We've continued our expansion in 2005 by strengthening our Unified
Security Architecture and delivering a unique set of integrated
network security solutions for our customers. We believe that our
innovative technology, breadth of solutions and customer acceptance
will serve as the foundation for our future success." Conference
Call and Webcast Information Check Point will host a conference
call with the investment community on January 30, 2006 at 8:30 AM
ET/5:30 AM PT. To listen to the live webcast, please visit Check
Point's website at http://www.checkpoint.com/ir. A replay of the
conference call will be available through February 13, 2006 at the
Company's website http://www.checkpoint.com/ir or by telephone at
(973) 341-3080, pass code 6888307. Safe Harbor Statement Certain
statements in this press release are forward-looking statements.
Forward-looking statements include statements regarding factors
driving Check Point's position as a provider of network security
and position for long-term success, and Check Point's beliefs
regarding the potential benefits of the pending acquisition of
Sourcefire, as well as Check Point's expectations regarding the
timing of receipt of any regulatory approvals and completion of the
acquisition. These statements pertain to future events, and
therefore they are subject to various risks and uncertainties, and
actual results could differ materially from Check Point's current
expectations and beliefs. Factors that could cause or contribute to
such differences include, but are not limited to: the impact on
revenues of economic and political uncertainties, the impact of
political changes 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 foreseen and
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; rapid technological advances and changes in customer
requirements to which Check Point is unable to respond
expeditiously, if at all; a shift in demand for products such as
Check Point's; 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; the
parties' ability to consummate the Sourcefire transaction,
including the ability of the parties to secure the CFIUS approval
required for the transaction on the terms expected or on the
anticipated schedule, if at all; unanticipated expenses associated
with the Sourcefire acquisition; the possibility that Check Point
may be unable to achieve all of the benefits of the acquisition
within the expected time-frames or at all and to successfully
integrate Sourcefire's operations and technology into those of
Check Point; operating costs, customer loss and business disruption
(including, without limitation, difficulties in maintaining
relationships with employees, customers, clients or suppliers) may
be greater than expected following the Sourcefire acquisition; and
other factors and risks discussed in Check Point's Annual Report on
Form 20-F for the year ended December 31, 2004, 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 Ltd. Check Point Software
Technologies Ltd. (www.checkpoint.com) is a leader in securing the
Internet. It is a market leader in the worldwide enterprise
firewall, personal firewall and VPN markets. Through its NGX
platform, the company delivers a unified security architecture for
a broad range of perimeter, internal, Web, and endpoint security
solutions that protect business communications and resources for
corporate networks and applications, remote employees, branch
offices and partner extranets. The company's ZoneAlarm product line
is the highest rated personal computer security suite, comprised of
award-winning endpoint security solutions that protect millions of
PCs from hackers, spyware and data theft. 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 2,200 Check Point partners in 88
countries and its customers include 100% of Fortune 100 companies
and tens of thousands of businesses and organizations of all sizes.
(C)2003-2005 Check Point Software Technologies Ltd. All rights
reserved. Check Point, Application Intelligence, Check Point
Express, the Check Point logo, AlertAdvisor, ClusterXL, Cooperative
Enforcement, ConnectControl, Connectra, CoSa, Cooperative Security
Alliance, Eventia, Eventia Analyzer, Eventia Reporter, FireWall-1,
FireWall-1 GX, FireWall-1 SecureServer, FloodGate-1, Hacker ID,
IMsecure, INSPECT, INSPECT XL, Integrity, InterSpect, IQ Engine,
NGX, Open Security Extension, OPSEC, Policy Lifecycle Management,
Provider-1, Safe@Home, Safe@Office, SecureClient, SecureKnowledge,
SecurePlatform, SecuRemote, SecureXL Turbocard, SecureServer,
SecureUpdate, SecureXL, SiteManager-1, SmartCenter, SmartCenter
Pro, Smarter Security, SmartDashboard, SmartDefense, SmartLSM,
SmartMap, SmartUpdate, SmartView, SmartView Monitor, SmartView
Reporter, SmartView Status, SmartViewTracker, SofaWare, SSL Network
Extender, Stateful Clustering, TrueVector, Turbocard, 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, VPN-1 VSX, VPN-1 XL, Web Intelligence,
ZoneAlarm, ZoneAlarm Pro, Zone Labs, and the Zone Labs logo, 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, 5,835,726, 6,496,935,
6,873,988 and 6,850,943 and may be protected by other U.S. Patents,
foreign patents, or pending applications. (1) "Acquisition related
charges" refer to the impact of the amortization of intangible
assets and stock-based compensation resulting from the acquisition
of Zone Labs Inc., in March 2004. -0- *T CHECK POINT SOFTWARE
TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts) Three Months Ended Year
Ended December 31, December 31, 2005 2004 2005 2004 -----------
----------- ----------- ----------- (unaudited) (unaudited)
(unaudited) (unaudited) Revenues: Products and licenses $ 78,978 $
77,142 $ 281,364 $275,677 Software subscriptions 61,585 53,268
239,319 196,327 ----------- ----------- ----------- -----------
Total product and license revenues 140,563 130,410 520,683 472,004
Services 15,495 12,639 58,667 43,356 ----------- -----------
----------- ----------- Total revenues 156,058 143,049 579,350
515,360 ----------- ----------- ----------- ----------- Operating
expenses: Cost of revenues 6,344 5,988 24,718 23,552 Research and
development 12,193 12,015 49,290 43,186 Selling and marketing
36,271 36,487 140,283 132,796 General and administrative 5,772
6,050 23,984 23,657 Amortization of intangible assets and deferred
stock compensation 2,161 2,783 9,387 8,852 Acquisition related
in-process R&D - - - 23,098 ----------- ----------- -----------
----------- Total operating expenses 62,741 63,323 247,662 255,141
----------- ----------- ----------- ----------- Operating income
93,317 79,726 331,688 260,219 Financial income, net 13,987 11,970
54,177 44,777 ----------- ----------- ----------- -----------
Income before income taxes 107,304 91,696 385,865 304,996 Income
taxes 18,067 15,252 66,181 56,603 ----------- -----------
----------- ----------- Net income $ 89,237 $ 76,444 $ 319,684 $
248,393 =========== =========== =========== =========== Net income
excluding in-process R&D and amortization of intangible assets
and deferred stock compensation $ 90,857 $ 78,684 $ 326,905 $
278,717 =========== =========== =========== =========== Earnings
per share (basic) $ 0.36 $ 0.31 $ 1.30 $ 0.99 ===========
=========== =========== =========== Number of shares used in
computing earnings per share (basic) 244,517 248,585 245,520
251,244 =========== =========== =========== =========== Earnings
per share (fully diluted) $ 0.36 $ 0.30 $ 1.27 $ 0.95 ===========
=========== =========== =========== Earnings per share (fully
diluted) excluding in-process R&D and amortization of
intangible assets and deferred stock compensation $ 0.37 $ 0.31 $
1.30 $ 1.07 =========== =========== =========== =========== Number
of shares used in computing earnings per share (fully diluted)
248,585 257,459 251,747 260,608 =========== =========== ===========
=========== CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED
CONSOLIDATED BALANCE SHEET DATA (In thousands) ASSETS December 31,
December 31, 2005 2004 ------------ ------------ (unaudited)
(unaudited) Current Assets: Cash and cash equivalents $ 298,531 $
162,444 Marketable securities 1,052,070 791,799 Trade receivables,
net 127,129 96,006 Other receivables and prepaid expenses 20,646
20,517 ------------ ------------ Total current assets 1,498,376
1,070,766 ------------ ------------ Long-term assets: Long-term
investments 386,753 623,045 Other long-term assets 875 867 Property
and equipment, net 7,665 8,144 Intangible assets 20,215 25,857
Goodwill 174,295 175,536 Deferred income taxes, net 5,650 8,439
------------ ------------ Total long-term assets 595,453 841,888
------------ ------------ Total assets $ 2,093,829 $ 1,912,654
============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Deferred revenues $ 168,998 $ 141,114 Trade
payables and other accrued liabilities 136,872 137,932 ------------
------------ Total current liabilities 305,870 279,046 ------------
------------ Accrued severance pay, net 3,271 2,784 ------------
------------ Total liabilities 309,141 281,830 ------------
------------ Shareholders' Equity: Share capital 774 771 Additional
paid-in capital 386,544 369,452 Deferred stock based compensation
(2,831) (10,342) Treasury shares (380,834) (244,586) Retained
earnings 1,781,035 1,515,529 ------------ ------------ Total
shareholders' equity 1,784,688 1,630,824 ------------ ------------
Total liabilities and shareholders' equity $2,093,829 $1,912,654
============ ============ Total cash and cash equivalents and
marketable securities 1,737,354 1,577,288 ============ ============
CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED CONSOLIDATED CASH
FLOW DATA (In thousands) Three Months Ended Year Ended December 31,
December 31, 2005 2004 2005 2004 ----------- -----------
----------- ----------- (unaudited) (unaudited) (unaudited)
(unaudited) Cash flow from operating activities: Net income $
89,237 $ 76,444 $ 319,684 $ 248,393 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization 1,371 1,382 5,352 5,519 Increase in trade and
other receivables, net (44,777) (23,233) (31,451) (20,644) Increase
in trade payables and other accrued liabilities 27,467 14,865
28,402 17,868 Other adjustments 6,028 1,285 15,552 1,426
Amortization of intangible assets and deferred stock compensation
2,161 2,783 9,387 8,852 Acquisition related in-process R&D - -
- 23,098 ----------- ----------- ----------- ---------- Net cash
provided by operating activities 81,487 73,526 346,926 284,512
----------- ----------- ----------- ----------- Cash flow from
investing activities: Cash paid in conjunction with the acquisition
of Zone Labs, net - - - (95,343) Investment in property and
equipment (1,392) (1,169) (4,873) (4,500) ----------- -----------
----------- ----------- Net cash used in investing activities
(1,392) (1,169) (4,873) (99,843) ----------- -----------
----------- ----------- Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options 11,937
10,992 54,942 34,481 Purchase of treasury shares (27,466) (44,349)
(236,929) (244,586) ----------- ----------- ----------- -----------
Net cash used in financing activities (15,529) (33,357) (181,987)
(210,105) ----------- ----------- ----------- ----------- Increase
(decrease) in cash and cash equivalents, deposits and marketable
securities 64,566 39,000 160,066 (25,436) Cash and cash
equivalents, deposits and marketable securities at the beginning of
the period 1,672,788 1,538,288 1,577,288 1,602,724 -----------
----------- ----------- ----------- Cash and cash equivalents and
marketable securities at the end of the period 1,737,354 1,577,288
1,737,354 1,577,288 =========== =========== =========== ===========
*T
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