Check Point� Software Technologies Ltd. (NASDAQ:CHKP), the
worldwide leader in securing the Internet, today announced record
financial results for the first quarter ended March 31, 2009.
�We posted record first quarter revenues of $195 million and
non-GAAP earnings per diluted share of $0.45 cents during the
quarter providing a good start for the year,� said Gil Shwed,
chairman and chief executive officer at Check Point. �Our
operational discipline continues to translate into increased
profitability with non-GAAP operating margin of 56 percent and
record cash flow from operations of $172 million.�
Financial Highlights for the First Quarter of 2009
- Total Revenues: $195.0
million, an increase of 2 percent, compared to $191.6 million in
the first quarter of 2008.
- Operating Income: GAAP
operating income was $92.3 million, up from $78.7 million a year
ago. Non-GAAP operating income was $109.0 million, an increase of
11 percent compared to $98.1 million a year ago. Non-GAAP operating
margin reached a record level of 56 percent, compared to 51 percent
a year ago.
- Net Income: GAAP net
income was $80.9 million compared to $78.3 million in the first
quarter of 2008. Non-GAAP net income was $95.5 million, compared to
$93.4 million in the first quarter of 2008.
- Earnings per Diluted Share
(EPS): $0.38 compared to $0.36 in the first quarter of 2008.
Non-GAAP EPS was $0.45, an increase of 6 percent, compared to $0.43
in the first quarter of 2008.
- Deferred Revenues: As of
March 31, 2009, we had deferred revenue of $325.0 million, which
represented a $46.6 million increase compared to deferred revenues
as of March 31, 2008.
- Cash Flow: Cash flow from
operations was $171.8 million, an increase of 20 percent, compared
to $142.9 million in the first quarter of 2008. We had $1,590.8
million in cash and investments as of March 31, 2009.
- Share Repurchase Program:
During the first quarter of 2009, we repurchased 2.3 million shares
at a total cost of $52.3 million.
Our Non-GAAP operating income reached a record high first
quarter result of $109.0 million representing 56 percent of
revenues, primarily as a result of our operational efficiency and
aided by the favorable foreign exchange currency trends on our
expenses. We realized record cash flow from operations of $171.8
million and ended the quarter with $1,590.8 million in cash and
investments.
Mr. Shwed continued, �Producing record first quarter results
despite the current macro economic situation is a testimony to the
continued demand for internet security and to Check Point�s
leadership position.�
Business Highlights
The first quarter of 2009 marked the introduction of Check
Point�s revolutionary software blade architecture designed to
address the security needs of any size customer by delivering
total, flexible, and manageable security solutions. The new
software blade architecture allows customers to configure their
security solutions by choosing from a comprehensive library of over
20 security software blades.
Subsequent to the end of the first quarter on April 13, 2009, we
completed the acquisition of the Nokia Security Appliance Business.
Customers can now purchase the former Nokia appliances as Check
Point IP appliances with integrated software, services and hardware
from Check Point. These appliances join Check Point�s UTM-1 and
Power-1 appliance lines providing the industry�s most comprehensive
line of security appliances.
In addition, during April, we introduced the new Power-1 11000
series appliances for high performance environments. The new
Power-1 11000 series provides customers with breakthrough
flexibility and performance upgradability of up to 25 Gbps for
firewall throughput and 15 Gbps for IPS in a 2-U form factor.
Mr. Shwed concluded, �Our Software Blade architecture, combined
with our expanded appliance portfolio, will allow us to continue
providing the best solutions to our customers worldwide and will
enable us to continue realizing increased revenues and earnings per
share in 2009.�
Conference Call and Webcast Information
Check Point will host a conference call with the investment
community on April 27, 2009 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 May 11, 2009 at the company's website
http://www.checkpoint.com/ir
or by telephone at +1 201.612.7415, passcode # 319225, account #
215.
About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (www.checkpoint.com),
worldwide leader in securing the Internet, is the only vendor to
deliver Total Security for networks, data and endpoints, unified
under a single management framework. Check Point provides customers
uncompromised protection against all types of threats, reduces
security complexity and lowers total cost of ownership. Check Point
first pioneered the industry with FireWall-1 and its patented
stateful inspection technology. Today, Check Point continues to
innovate with the development of the Software Blade architecture.
The dynamic Software Blade architecture delivers secure, flexible
and simple solutions that can be fully customized to meet the exact
security needs of any organization or environment. Check Point
customers include tens of thousands of businesses and organizations
of all sizes including all Fortune 100 companies. Check Point's
award-winning ZoneAlarm solutions protect millions of consumers
from hackers, spyware and identity theft.
�2009 Check Point Software Technologies Ltd. All rights
reserved.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Check Point uses
non-GAAP measures of net income, operating income and earnings per
share, which are adjustments from results based on GAAP to exclude
non-cash equity-based compensation charges in accordance with SFAS
123R, acquisition related charges and the related tax affects.
Check Point�s management believes the non-GAAP financial
information provided in this release is useful to investors�
understanding and assessment of Check Point�s on-going core
operations and prospects for the future. The presentation of this
non-GAAP financial information is not intended to be considered in
isolation or as a substitute for results prepared in accordance
with GAAP. Management uses both GAAP and non-GAAP information in
evaluating and operating business internally and as such has
determined that it is important to provide this information to
investors.
Safe Harbor Regarding Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section�27A of the Securities Act of 1933 and
Section�21E of the Securities Exchange Act of 1934, including, but
not limited to, our belief that our software blade architecture,
combined with our expanded appliance portfolio, will allow us to
continue providing the best solutions to our customers worldwide
and will enable us to continue realizing increased revenues and
earnings per share in 2009. Because these statements pertain to
future events they are subject to various risks and uncertainties,
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: general market
conditions in Check Point�s industry; economic and political
uncertainties; the financial and business conditions affecting our
customers; the impact of political changes and weaknesses in
various regions of the world, including hostilities or acts of
terrorism�in Israel, where�Check Point�s international headquarters
are based; 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; and the timely availability
and customer acceptance of Check Point's new and existing products.
The forward-looking statements contained in this press release are
subject to other factors and risks, including those discussed in
Check Point's Annual Report on Form 20-F for the year ended
December 31, 2008, which is on file with the Securities and
Exchange Commission. The statements made in this press release are
based on Check Point�s expectations or beliefs as of the date
hereof, and Check Point assumes no obligation to update information
concerning its expectations or beliefs.
CHECK POINT SOFTWARE
TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In thousands, except per share
amounts)
� � Three Months Ended March 31, 2009 2008 (unaudited) (unaudited)
Revenues: Products and licenses $71,744 $77,379 Software updates,
maintenance and services 123,268 114,218 Total revenues 195,012
191,597 � Operating expenses: Cost of products and licenses 9,626
8,993 Cost of software updates, maintenance and services 5,829
6,750 Amortization of technology 5,800 7,154 Total cost of revenues
21,255 22,897 �
Research and development
19,787
22,745
Selling and marketing 47,072 53,660 General and administrative
14,617 13,566 Total operating expenses 102,731 112,868 � Operating
income 92,281 78,729 Financial income, net 8,413 12,363 Income
before income taxes 100,694 91,092 Taxes on income 19,773 12,834
Net income $80,921 $78,258 �
Earnings per share (basic)
$0.39 $0.36 Number of shares used in computing earnings per share
(basic) 210,153 217,065 �
Earnings per share (diluted)
$0.38 $0.36 Number of shares used in computing earnings per share
(diluted) 212,083 219,393 �
CHECK POINT SOFTWARE
TECHNOLOGIES LTD.
RECONCILIATION OF SELECTED GAAP
MEASURES TO NON GAAP MEASURES
(In thousands, except per share
amounts)
� Three Months Ended March 31, 2009 � 2008 (unaudited) (unaudited)
� GAAP operating income $92,281 $78,729 Stock-based compensation
(1) 7,803 9,071 Amortization of intangible assets (2) 8,893 �
10,303 � Non-GAAP operating income $108,977 � $98,103 � � GAAP net
income $80,921 $78,258 Stock-based compensation (1) 7,803 9,071
Amortization of intangible assets (2) 8,893 10,303 Taxes on
stock-based compensation and amortization of intangible assets (3)
(2,123 ) (4,264 ) Non-GAAP net income $95,494 � $93,368 � � GAAP
Earnings per share (diluted) $0.38 $0.36 Stock-based compensation
(1) 0.04 0.04 Amortization of intangible assets (2) 0.04 0.05 Taxes
on stock-based compensation and amortization of intangible assets
(3) (0.01 ) (0.02 ) Non-GAAP Earnings per share (diluted) $0.45 �
$0.43 � � Number of shares used in computing Non-GAAP earnings per
share (diluted) 212,083 � 219,393 � � Non GAAP Adjustments (1)
Stock-based compensation: Cost of products and licenses $8 $12 Cost
of software updates, maintenance and services 193 183 Research and
development 1,258 1,097 Selling and marketing 1,740 2,240 General
and administrative 4,604 � 5,539 � 7,803 9,071 � (2) Amortization
of intangible assets: Cost of products and licenses 5,800 7,154
Selling and marketing 3,093 � 3,149 � 8,893 10,303 � (3) Taxes on
stock-based compensation and amortization of intangible assets
(2,123 ) (4,264 ) Total, net $14,573 � $15,110 � �
CHECK POINT SOFTWARE
TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE
SHEET DATA
(In thousands)
ASSETS
� � March 31, December 31, 2009 2008 (unaudited) (audited) Current
assets: Cash and cash equivalents $670,665 $543,190 Marketable
securities and deposits 335,795 371,197 Trade receivables, net
170,966 251,771 Other current assets 27,725 � 28,372 � Total
current assets 1,205,151 � 1,194,530 � � Long-term assets:
Marketable securities 584,359 529,445 Property, plant and
equipment, net 38,830 40,248 Severance pay fund 5,327 5,817
Deferred income taxes, net 18,301 19,003 Intangible assets, net
114,258 123,151 Goodwill 664,602 664,602 Other assets 16,761 �
16,820 � Total long-term assets 1,442,438 � 1,399,086 � � Total
assets $2,647,589 � $2,593,616 � �
LIABILITIES AND
SHAREHOLDERS� EQUITY
� Current liabilities: Short-term deferred revenues $283,094
$289,998 Trade payables and other accrued liabilities 117,919 �
112,556 � Total current liabilities 401,013 � 402,554 � � Long-term
deferred revenues 41,926 40,799 Income tax accrual 93,124 101,230
Deferred tax liability, net 19,915 22,225 Accrued severance pay
9,806 � 10,943 � � Total liabilities 565,784 � 577,751 � � �
Shareholders� equity: Share capital 774 774 Additional paid-in
capital 506,143 503,408 Treasury shares at cost (1,126,210 )
(1,105,250 ) Accumulated other comprehensive income (1,429 ) (4,673
) Retained earnings 2,702,527 � 2,621,606 � Total shareholders�
equity 2,081,805 � 2,015,865 � Total liabilities and shareholders�
equity $2,647,589 � $2,593,616 � Total cash and cash equivalents
and marketable $1,590,819 � $1,443,832 � �
CHECK POINT SOFTWARE
TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW
DATA
(In thousands)
� Three Months Ended March 31, 2009 � 2008 (unaudited) (unaudited)
Cash flow from operating activities: Net income $80,921 $78,258
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization of property,
plant and equipment 2,812 2,148 Decrease in trade and other
receivables, net 80,707 48,168 Increase (decrease) in deferred
revenues, trade payables and other accrued liabilities
(6,884
)
3,331
Realized loss on marketable securities 1,896 - Stock-based
compensation 7,803 9,071 Amortization of intangible assets 8,893
10,303 Excess tax benefit from stock-based compensation (2,471 )
(3,348 ) Deferred income taxes, net (1,890 ) (5,055 ) Net cash
provided by operating activities 171,787 � 142,876 � � Cash flow
from investing activities: Investment in property, plant and
equipment (1,394 ) (1,935 ) Net cash used in investing activities
(1,394 ) (1,935 ) � Cash flow from financing activities: Proceeds
from issuance of upon exercise of options 23,789 6,468 Purchase of
treasury shares (52,288 ) (73,000 ) Excess tax benefit from
stock-based compensation 2,471 � 3,348 � Net cash used in financing
activities (26,028 ) (63,184 ) � Unrealized gain (loss) on
marketable securities, net 2,622 � (560 ) � Increase in cash and
cash equivalents, deposits and marketable securities 146,987 77,197
� Cash and cash equivalents, deposits and marketable securities at
the beginning of the period 1,443,832 � 1,241,509 � � Cash and cash
equivalents, deposits and marketable securities at the end of the
period $1,590,819 � $1,318,706 �
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