Check Point Software Reports Financial Results for the First Quarter of 2008
* Revenue: $191.6 Million - 17% growth year over year
* Products & Licenses Revenue: $77.4 Million - 17% growth year over year
* Non-GAAP EPS: $0.43 - 23% growth year over year
* Cash Flow from Operations: $142.9 Million - 30% growth year over year REDWOOD CITY, Calif., -- April 17, 2008 — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced its financial results for the first quarter ended March 31, 2008.
"This quarter marked another milestone for Check Point as our financial results continued to reflect the successful execution of our strategy. During the quarter we realized 17% revenue growth and 17% growth in products and licenses revenue compared to the same period a year ago." said Gil Shwed, chairman and chief executive officer at Check Point.
"We experienced strong cash flow from operations of $142.9 million during the quarter, representing a 30% increase over the prior year and non-GAAP EPS posted 23% growth over the prior year."
Financial Highlights for the First Quarter of 2008:
* Total Revenues: $191.6 million, an increase of 17 percent, compared to $164.0 million in the first quarter of 2007.
Product and license revenue was $77.4 million, an increase of 17 percent, compared to $66.0 million in the first quarter of 2007.
* Net Income – GAAP: $78.3 million, an increase of 67 percent, compared to $46.9 million in the first quarter of 2007.
Net income in the first quarter of 2008 includes acquisition-related charges of $10.3 million and equity-based compensation expenses of $9.1 million.
Net of taxes, these charges totaled $15.1 million.
Net income in the first quarter of 2007 included acquisition-related charges of $9.0 million, $17.0 million of in-process R&D expense and equity-based compensation expenses of $8.3 million.
Net of taxes these charges totaled $31.7 million.
* Net Income – Non-GAAP:1 $93.4 million, an increase of 19 percent, compared to $78.6 million in the first quarter of 2007. Non-GAAP net income excludes equity-based compensation expenses, in-process R&D expense and acquisition-related charges.
* Earnings per Diluted Share – GAAP: $0.36, an increase of 71 percent, compared to $0.21 in the first quarter of 2007. GAAP earnings per diluted share for the first quarter of 2008 included equity-based compensation expenses of $0.04 and acquisition-related charges of $0.05.
Net of taxes, these charges totaled $0.07. GAAP earnings per diluted share for the first quarter of 2007 included acquisition-related charges of $0.04, in-process R&D expense of $0.07 and equity-based compensation expenses of $0.04.
Net of taxes these charges totaled $0.14.
* Earnings per Diluted Share – Non-GAAP: $0.43, an increase of 23 percent, compared to $0.35 in the first quarter of 2007. Non-GAAP earnings per diluted share exclude equity-based compensation expenses, in-process R&D expense and acquisition-related charges.
* Deferred Revenues: As of March 31, 2008, we had deferred revenue of $278.4 million, which represented a sequential increase of $4.7 million compared to deferred revenue as of December 31, 2007, and a $40 million increase compared to deferred revenues as of March 31, 2007.
* Cash Flow: Cash flow from operations was $142.9 million, an increase of 30 percent, compared to $110.0 million in the first quarter of 2007. We had $1.3 billion in cash and investments as of March 31, 2008.
* Share Repurchase Program:
During the first quarter of 2008, Check Point repurchased 3.4 million shares at a total cost of $73.0 million. In March we announced a $400 million expansion of our share repurchase program.
See "Use of Non-GAAP Financial Information" and "Reconciliation of Supplemental Financial Information" below for more information regarding Check Point's use of non-GAAP measures.
"Equity-based compensation expenses" refer to the amortized fair value of all equity based awards granted to employees. "Acquisition- related charges" refer to the impact of the amortization of intangibles. We began the year by unveiling our Total Security™ strategy directed at becoming the security vendor of choice for companies worldwide. Our strategy mirrors our customers' security needs by focusing on delivering the highest level of security while reducing the complexity of deployment and simplifying the management of our customers' security infrastructure.
The core of the Check Point Total Security Solution includes:
* Unified line of security gateways, offering customers a broad range of deployment options to fit a customer site of any size. We provide our customers with a choice of software solutions which can be deployed on open platforms or as integrated solutions from one of our appliance partners. Our customers can also purchase fully integrated solutions from Check Point in the form of UTM-1™ appliances or our new line of high-end Power-1™ appliances. Our security gateway solutions scale from a price point of $150 and higher with performance up to 40Gbps and beyond. All our security gateways share the same security architecture.
* Single agent for endpoint security designed to maximize security and reduce the complexities of deploying and managing endpoint solutions.
* Single console for security management which provides our customers with single console to effectively and efficiently manage their security deployments across the enterprise. Since the beginning of 2008 we have made further security product introductions and expanded current product lines underscoring our intent to be the security vendor of choice throughout the enterprise:
* In February, we unveiled the industry's first single agent for endpoint security combining endpoint firewall, anti-virus/anti-spyware, remote access VPN, and data security in a best in breed suite designed to reduce the complexity of deployment and management while increasing security on the endpoint.
* This week we announced a new line of Check Point high-end Power-1 appliances delivering Check Point security with performance of up to 14Gbps, with leading price/performance of under $4/Mbps.
* In addition, we announced the expansion of the UTM-1 Total Security™ line of appliances with new models ranging from an entry level unit priced at under $5000 to a high-performance 4.5Gbps model. UTM-1 solutions provide an integrated set of security applications to customers, including Check Point's leading firewall technology, remote access and site-to-site VPN capabilities, gateway anti-virus, intrusion prevention capabilities, web filtering, e-mail security and anti-spam.
Mr. Shwed continued "We are very pleased with the overall performance of the company during the quarter and believe that our success is a result of our continued focus on delivering efficient and highly effective security products that address the total security needs of our customers worldwide."
About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (www.checkpoint.com) is the leader in securing the Internet. Check Point offers total security solutions featuring a unified gateway, single endpoint agent and single management architecture, customized to fit customers' dynamic business needs. This combination is unique and is a result of our leadership and innovation in the enterprise firewall, personal firewall/endpoint, data security and VPN markets. Check Point's award-winning ZoneAlarm solutions protect millions of consumer PCs from hackers, spyware and identity theft. Check Point solutions are sold, integrated and serviced by a network of Check Point partners around the world and its customers include 100 percent of Fortune 100 companies and tens of thousands of businesses and organizations of all sizes.
©2003–2008 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, in-process R&D expense and acquisition related charges. 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...
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