Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the
worldwide leader in securing the Internet, today announced record
financial results for the third quarter ended September 30, 2009.
"I am proud of our ability to execute and deliver all-time
record results across key metrics for the quarter. Our revenues
came in at the high-end of our projections, with 17 percent growth,
while non-GAAP earnings per share were $0.52, representing 19%
growth, and exceeded our projections. This is particularly
encouraging given the state of the economy and the weakness of the
US dollar," said Gil Shwed, Chairman and Chief Executive Officer at
Check Point. "Operationally, we performed well across all regions,
with Asia Pacific having a particularly good quarter. We also
continued to realize further synergies from our recent acquisition,
which helped us to achieve these results and deliver non-GAAP
operating margin of 55%."
Financial Highlights for the Third Quarter of
2009
- Total Revenues: $233.6 million, an
increase of 17 percent compared to $199.7 million in the third
quarter of 2008.
- GAAP Operating Income: $105.5 million, an
increase of 17 percent compared to $90.4 million in the third
quarter of 2008. The GAAP operating income in the third quarter of
2009 included amortization of intangible assets in the amount of
$5.4 million related to the Nokia security business
acquisition.
- Non-GAAP(1) operating income: $127.5
million, an increase of 20 percent compared to $106.2 million in
the third quarter of 2008. Non-GAAP operating margin was 55
percent, compared to 53 percent in the third quarter of 2008, and
52 percent during the second quarter of 2009.
- GAAP Net Income and Earnings per Diluted
Share: GAAP net income was $91.5 million, an increase of 14
percent compared to $80.1 million in the third quarter of 2008.
GAAP earnings per diluted share were $0.43, an increase of 17
percent compared to $0.37 in the third quarter of 2008. GAAP net
income in the third quarter of 2009 included amortization of
intangible assets in the amount of $5.4 million (which represented
$0.03 in GAAP earnings per diluted share) related to the Nokia
security business acquisition. Net of taxes, these charges totaled
$5.1 million ($0.02 per diluted share).
- Non-GAAP(1) Net Income and Earnings per
Diluted Share: Non-GAAP net income was $109.5 million, an
increase of 16 percent compared to $94.2 million in the third
quarter of 2008, and non-GAAP EPS was $0.52, an increase of 19
percent compared to $0.44 in the third quarter of 2008.
- Deferred Revenues: As of September 30,
2009, we had deferred revenue of $360.1 million, an increase of 32
percent compared to $272.9 as of September 30, 2008.
- Cash Flow: Cash flow from operations was
$126.1 million, an increase of 10 percent compared to $115.1
million in the third quarter of 2008. We had $1,736.2 million in
cash and investments as of September 30, 2009.
- Share Repurchase Program: During the
third quarter of 2009, we repurchased 1.8 million shares at a total
cost of $50 million.
(1)For information regarding the non-GAAP financial measures
discussed in this release, please see "Use of Non-GAAP Financial
Information" and "Reconciliation of Non-GAAP to GAAP Financial
Information."
Mr. Shwed concluded, "We continued to realize good traction from
our latest product introductions, including the new SMART-1
management appliances, the high-end Power-1 11000 series and
low-end UTM-1 130 appliances. Our Software Blade Architecture
experienced excellent adoption by our customers as they continue to
recognize the benefits of a secure, flexible and easily managed
security platform."
Conference Call and Webcast Information
Check Point will host a conference call with the investment
community on October 22, 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 October 29, 2009 at the company's website
http://www.checkpoint.com/ir or by telephone at +1 201.612.7415,
passcode # 335046, account # 215.
About Check Point Software Technologies
Ltd. Check Point Software Technologies Ltd.
(www.checkpoint.com), a worldwide leader in securing the Internet,
is the only vendor to delivers 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, impairment of
marketable securities, amortization of acquired intangible assets,
restructuring-related charges and the related tax affects.
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. Check
Point's management also 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.
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------------ ------------------------
September 30, September 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Products and licenses $ 86,882 $ 81,925 $ 241,427 $ 244,277
Software updates,
maintenance and
services 146,759 117,795 410,867 346,646
----------- ----------- ----------- -----------
Total revenues 233,641 199,720 652,294 590,923
----------- ----------- ----------- -----------
Operating expenses:
Cost of products and
licenses 18,598 10,267 45,061 28,953
Cost of software
updates, maintenance
and services 10,033 6,941 26,637 20,792
Amortization of
technology 7,471 5,800 20,501 18,754
----------- ----------- ----------- -----------
Total cost of revenues 36,102 23,008 92,199 68,499
Research and
development 22,426 23,193 65,681 69,762
Selling and marketing 56,379 50,796 160,390 161,044
General and
administrative 13,190 12,294 40,487 38,865
Restructuring 67 - 9,101 -
----------- ----------- ----------- -----------
Total operating expenses 128,164 109,291 367,858 338,170
----------- ----------- ----------- -----------
Operating income 105,477 90,429 284,436 252,753
Financial income, net 7,825 10,039 24,368 30,351
Other than temporary
impairment on marketable
securities - (2,288) - (2,288)
----------- ----------- ----------- -----------
Income before income
taxes 113,302 98,180 308,804 280,816
Taxes on income 21,839 18,119 60,817 43,324
----------- ----------- ----------- -----------
Net income $ 91,463 $ 80,061 $ 247,987 $ 237,492
=========== =========== =========== ===========
Earnings per share
(basic) $ 0.44 $ 0.37 $ 1.18 $ 1.10
=========== =========== =========== ===========
Number of shares used in
computing earnings per
share (basic) 208,738 213,728 209,465 215,247
=========== =========== =========== ===========
Earnings per share
(diluted) $ 0.43 $ 0.37 $ 1.17 $ 1.09
=========== =========== =========== ===========
Number of shares used in
computing earnings per
share (diluted) 211,688 216,567 211,790 217,942
=========== =========== =========== ===========
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------------ ------------------------
September 30, September 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
GAAP operating income $ 105,477 $ 90,429 $ 284,436 $ 252,753
Stock-based
compensation (1) 7,695 6,857 22,769 24,313
Amortization of
intangible assets (2) 14,301 8,893 36,647 28,090
Restructuring (3) 67 - 9,101 -
----------- ----------- ----------- -----------
Non-GAAP operating
income $ 127,540 $ 106,179 $ 352,953 $ 305,156
=========== =========== =========== ===========
GAAP net income $ 91,463 $ 80,061 $ 247,987 $ 237,492
Stock-based
compensation (1) 7,695 6,857 22,769 24,313
Amortization of
intangible assets (2) 14,301 8,893 36,647 28,090
Restructuring (3) 67 - 9,101 -
Other than temporary
impairment * (4) - 2,288 - 2,288
Taxes on stock-based
compensation,
amortization of
intangible assets and
other than temporary
impairment (5) (4,040) (3,849) (10,662) (11,867)
----------- ----------- ----------- -----------
Non-GAAP net income $ 109,486 $ 94,250 $ 305,842 $ 280,316
=========== =========== =========== ===========
GAAP Earnings per share
(diluted) $ 0.43 $ 0.37 $ 1.17 $ 1.09
Stock-based
compensation (1) 0.04 0.04 0.11 0.11
Amortization of
intangible assets (2) 0.07 0.04 0.17 0.13
Restructuring (3) - - 0.04 -
Other than temporary
impairment * (4) - 0.01 - 0.01
Taxes on stock-based
compensation,
amortization of
intangible assets and
other than temporary
impairment (5) (0.02) (0.02) (0.05) (0.05)
----------- ----------- ----------- -----------
Non-GAAP Earnings per
share (diluted) $ 0.52 $ 0.44 $ 1.44 $ 1.29
=========== =========== =========== ===========
Number of shares used
in computing Non-GAAP
earnings per share
(diluted) 211,688 216,567 211,790 217,942
=========== =========== =========== ===========
(1) Stock-based
compensation:
Cost of products
and licenses $ 14 $ 15 $ 35 $ 42
Cost of software
updates,
maintenance
and services 236 133 536 510
Research and
development 1,998 1,364 4,771 3,665
Selling and
marketing 1,769 1,696 4,485 5,862
General and
administrative 3,678 3,649 12,942 14,234
----------- ----------- ----------- -----------
7,695 6,857 22,769 24,313
----------- ----------- ----------- -----------
(2) Amortization of
intangible assets:
Cost of products
and licenses 7,471 5,800 20,501 18,754
Selling and
marketing 6,830 3,093 16,146 9,336
----------- ----------- ----------- -----------
14,301 8,893 36,647 28,090
----------- ----------- ----------- -----------
(3) Restructuring 67 - 9,101 -
----------- ----------- ----------- -----------
(4) Other than
temporary impairment*
Financial income, net - 2,288 - 2,288
----------- ----------- ----------- -----------
(5) Taxes on stock-based
compensation,
amortization of
intangible assets and
other than temporary
impairment (4,040) (3,849) (10,662) (11,867)
----------- ----------- ----------- -----------
Total, net $ 18,023 $ 14,189 $ 57,855 $ 42,824
=========== =========== =========== ===========
* Relates to impairment of Lehman Brothers bonds.
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
ASSETS
September 30, December 31,
2009 2008
------------- -------------
(unaudited) (unaudited)
Current assets:
Cash and cash equivalents $ 608,221 $ 543,190
Short-term deposit - 26,302
Marketable securities 348,898 344,895
Trade receivables, net 191,156 251,771
Other current assets 34,477 28,372
------------- -------------
Total current assets 1,182,752 1,194,530
------------- -------------
Long-term assets:
Marketable securities 779,045 529,445
Property, plant and equipment, net 39,956 40,248
Severance pay fund 6,315 5,817
Deferred income taxes, net 16,926 19,003
Intangible assets, net 123,448 123,151
Goodwill 708,458 664,602
Other assets 21,167 16,820
------------- -------------
Total long-term assets 1,695,315 1,399,086
------------- -------------
Total assets $ 2,878,067 $ 2,593,616
============= =============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Deferred revenues $ 322,764 $ 289,998
Trade payables and other accrued liabilities 145,191 112,556
------------- -------------
Total current liabilities 467,955 402,554
------------- -------------
Long-term deferred revenues 37,361 40,799
Income tax accrual 121,138 101,230
Deferred tax liability, net 15,127 22,225
Accrued severance pay 11,125 10,943
------------- -------------
Total liabilities 652,706 577,751
------------- -------------
Shareholders' equity:
Share capital 774 774
Additional paid-in capital 512,200 503,408
Treasury shares at cost (1,173,239) (1,105,250)
Accumulated other comprehensive income
(loss) 16,895 (4,673)
Retained earnings 2,868,731 2,621,606
------------- -------------
Total shareholders' equity 2,225,361 2,015,865
------------- -------------
Total liabilities and shareholders' equity $ 2,878,067 $ 2,593,616
============= =============
Total cash and cash equivalents, deposits
and marketable securities $ 1,736,164 $ 1,443,832
============= =============
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW DATA
(In thousands)
Three Months Ended Nine Months Ended
------------------------ ------------------------
September 30, September 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Cash flow from
operating activities:
Net income $ 91,463 $ 80,061 $ 247,987 $ 237,492
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and
amortization of
property, plant and
equipment 2,190 2,257 7,226 6,548
Other than temporary
impairment - 2,288 - 2,288
Decrease (increase) in
trade and other
receivables, net (50) 1,770 85,050 38,638
Increase in deferred
revenues, trade
payables and other
accrued liabilities 15,494 20,836 24,769 25,380
Amortization of
intangible assets 14,301 8,893 36,647 28,090
Realized loss on
marketable securities - - 1,896 -
Stock-based
compensation 7,695 6,857 22,768 24,313
Excess tax benefit from
stock-based
compensation (2,474) (3,531) (6,988) (9,560)
Deferred income taxes,
net (2,487) (4,338) (8,729) (12,661)
----------- ----------- ----------- -----------
Net cash provided by
operating activities 126,132 115,093 410,626 340,528
----------- ----------- ----------- -----------
Cash flow from
investing activities:
Cash paid in
conjunction with the
acquisition of Protect
Data, net - - - (9,042)
Cash paid in
conjunction with the
acquisition of Nokia - - (57,540) -
Investment in property,
plant and equipment (1,043) (2,412) (3,644) (6,938)
----------- ----------- ----------- -----------
Net cash used in
investing activities (1,043) (2,412) (61,184) (15,980)
----------- ----------- ----------- -----------
Cash flow from
financing activities:
Proceeds from issuance
of shares upon
exercise of options 20,166 11,504 62,469 27,276
Purchase of treasury
shares (50,000) (49,825) (152,286) (172,825)
Excess tax benefit from
stock-based
compensation 2,474 3,531 6,988 9,560
----------- ----------- ----------- -----------
Net cash used in
financing activities (27,360) (34,790) (82,829) (135,989)
----------- ----------- ----------- -----------
Unrealized gain (loss)
on marketable
securities, net 8,255 (19,420) 25,719 (28,824)
----------- ----------- ----------- -----------
Increase in cash and
cash equivalents,
deposits and
marketable securities 105,984 58,471 292,332 159,735
Cash and cash
equivalents, deposits
and marketable
securities at the
beginning of the
period 1,630,180 1,342,773 1,443,832 1,241,509
----------- ----------- ----------- -----------
Cash and cash
equivalents, deposits
and marketable
securities at the end
of the period $ 1,736,164 $ 1,401,244 $ 1,736,164 $ 1,401,244
=========== =========== =========== ===========
INVESTOR CONTACT: Kip E. Meintzer Check Point Software
Technologies +1 650.628.2040 ir@us.checkpoint.com MEDIA CONTACT:
Greg Kunkel Check Point Software Technologies +1 650.628.2070
press@us.checkpoint.com
Check Point Software Tec... (NASDAQ:CHKP)
Historical Stock Chart
From Apr 2024 to May 2024
Check Point Software Tec... (NASDAQ:CHKP)
Historical Stock Chart
From May 2023 to May 2024
