Check Point Software Technologies Reports 2013 First

New Post Public Reply Private Reply Replies (0) Message Board

News Desk 2018

Apr 22, 2013 at 5:15 AM

Check Point Software Technologies Reports 2013 First Quarter Financial Results

SAN CARLOS, CA--(Marketwired - Apr 22, 2013) - Check Point® Software Technologies Ltd. ( NASDAQ : CHKP ), the worldwide leader in securing the Internet, today announced its financial results for the first quarter ending March 31, 2013.

Total Revenue: $322.7 million, representing a 3 percent increase year over year
Non-GAAP Operating Income: $189.1 million, representing 59 percent of revenues
Non-GAAP EPS: $0.79, representing a 7 percent increase year over year
Cash Flow from Operations: $331.4 million, representing a 20 percent increase year over year

"In the first quarter we significantly advanced attack prevention with the introduction of our leading-edge Threat Emulation Software Blade that prevents infections from undiscovered exploits, zero-day and targeted attacks. We were also recognized for our security leadership by Gartner, IDC and NSS Labs. This recognition underscores our product leadership and dedication to providing the best security to our customers," said Gil Shwed, founder, chairman, and chief executive officer of Check Point Software Technologies.

Financial Highlights for the First Quarter of 2013:

Total Revenue: $322.7 million compared to $313.1 million in the first quarter of 2012.
GAAP Operating Income: $177.0 million compared to $172.9 million in the first quarter of 2012. GAAP operating margin was 55 percent, same as in the first quarter of 2012.
Non-GAAP Operating Income: $189.1 million compared to $186.7 million in the first quarter of 2012. Non-GAAP operating margin was 59 percent, compared to 60 percent in the first quarter of 2012.
GAAP Net Income and Earnings per Diluted Share: GAAP net income was $148.0 million compared to $143.6 million in the first quarter of 2012. GAAP earnings per diluted share were $0.73 compared to $0.68 in the first quarter of 2012.
Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $159.3 million compared to $156.9 million in the first quarter of 2012. Non-GAAP earnings per diluted share were $0.79 compared to $0.74 in the first quarter of 2012.
Deferred Revenues : As of March 31, 2013, deferred revenues were $586.4 million compared to $542.2 million in the first quarter of 2012.
Cash Flow: Cash flow from operations was $331.4 million compared to $275.3 million in the first quarter of 2012.
Share Repurchase Program : During the first quarter of 2013, the company repurchased 2.64 million shares at a total cost of $131.6 million.
Cash Balances, Marketable Securities and Short Term Deposits: $3,523.4 million as of March 31, 2013, an increase of $402.2 million, compared to $3,121.2 million as of March 31, 2012.

For information regarding the Non-GAAP financial measures discussed in this release, please see "Use of Non-GAAP Financial Information" and "Reconciliation of GAAP to Non-GAAP Financial Information."

Business Highlights

Check Point continued to deliver innovative security solutions this past quarter with the introduction of advanced new products and technology that protect both enterprises and consumers.

Threat Emulation Software Blade - An innovative solution that prevents infections from new exploits, undiscovered threats, and targeted attacks. Check Point Threat Emulation inspects suspicious documents and emulates how they run in a virtual environment to discover malicious behavior and to prevent malware from entering the network.

Compliance Software Blade - The industry's first integrated compliance solution to leverage an extensive knowledgebase of regulatory requirements and IT security best practices, while providing a real-time view of compliance. Check Point's Compliance Software Blade ensures that security policies are aligned with global regulations and validates that appropriate security levels are maintained -- shortening audit times, improving security, and reducing costs for businesses.

New Data Center Appliance: 21700 Model - Provides market leading security and the fastest performance in a compact 2U chassis, protecting large enterprises and data centers with Check Point's award-winning Software Blade Architecture. It offers maximum security performance straight out of the box with 78 Gbps of firewall throughput, 25 Gbps of IPS throughput, and a 2,922 SecurityPower™ unit (SPU) rating. The 21700 is the third model in the 21000 series and increases the top performance by approximately 50 percent since the launch.

New Enterprise-Class Security in a Desktop Package: 1100 Model - Provides enterprise-class security in a compact desktop appliance perfect for small branch and remote offices. For the first time, small offices can benefit from the full software blade architecture starting at under $1,000.

ZoneAlarm 2013 Security Products - The new 2013 products, which are Windows 8 compatible, are the first to integrate a Facebook Privacy Scan and Do Not Track technologies. ZoneAlarm products also offer improved performance and security through advanced antivirus and firewall capabilities.

Industry Accolades

Leader in Gartner's Magic Quadrant for Enterprise Network Firewall - Check Point is positioned as a leader in Gartner's Magic Quadrant for Enterprise Network Firewall. The company has been in the leader's quadrant for 16 consecutive years.

Top Position in Worldwide Combined Firewall and UTM Appliance Market - Check Point continued to be the number one vendor in worldwide combined Firewall and UTM appliance revenue for 2012, according to the IDC Worldwide 2012 Security Appliance Tracker.

Triple NSS Labs "Recommend" Rating - Check Point achieved the top score in security effectiveness and management in the latest NSS Labs' Next Generation Firewall (NGFW) group test. Check Point also excelled in NSS Labs' latest round of Network Firewall and Intrusion Prevention System (IPS) tests -- earning a total of three "Recommend" ratings.

SC Magazine Reader Trust Award - SC Magazine readers selected Check Point for best enterprise firewall and best IPS solution in 2013.

CRN Channel Chief Award - Check Point President, Amnon Bar-Lev, has been named one of UBM Tech Channel's CRN 2013 Channel Chiefs. This is the sixth time Mr. Bar-Lev has been included on the prestigious list of the most influential and powerful leaders in the IT channel.

In addition, Check Point issued its 2013 Security Report, uncovering major security risks that impact organizations worldwide. The new report examines top security threats, risky web applications that compromise network security, and loss of data caused by employees unintentionally. Most importantly, it provides security recommendations on how to protect against these threats. The report is available at www.checkpoint.com .

Second Quarter 2013 Investor Conference Participation Schedule:

Jeffries Global TMT Conference May 7, 2013 - New York, NY
J.P. Morgan 41st Annual Technology, Media and Telecom Conference May 16, 2013 - Boston, MA
Barclays Global Technology, Media and Telecom Conference May 22, 2013 - New York, NY
Cowen & Company 41st Annual Technology Media & Telecom Conference May 30, 2013 - New York, NY
Bank of America Merrill Lynch 2013 Global Technology Conference June 5, 2013 - San Francisco, CA

Members of Check Point's management team will present at these conferences and discuss the latest company strategies and initiatives. Check Point's conference presentations are expected to be available via webcast on the company's web site. To view these presentations and access the most updated information please visit the company's web site at www.checkpoint.com/ir . The schedule is subject to change.

Conference Call and Webcast Information Check Point will host a conference call with the investment community on April 22, 2013 at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit the website at: www.checkpoint.com/ir . A replay of the conference call will be available through April 29, 2013 on the company's website or by telephone at +1.201.612.7415, replay ID number 412273.

About Check Point Software Technologies Ltd. Check Point Software Technologies Ltd. ( www.checkpoint.com ), the 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 with 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.

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, operating margin and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges, amortization of acquired intangible assets, and the related tax effects. 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 ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures in order to assist the investment community to see the Company "through the eyes of management," and thereby enhance understanding of its operating performance. 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. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. 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 SOFTWARE TECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per share amounts)

		Three Months Ended
		March 31,
		2013		2012
		(unaudited)		(unaudited)
Revenues:
	Products and licenses	$	106,530	$	110,182
	Software updates, maintenance and subscription		216,200		202,934
Total revenues			322,730		313,116

Operating expenses:
	Cost of products and licenses		18,849		19,604
	Cost of software updates, maintenance and subscription		17,854		16,039
	Amortization of technology		294		2,858
Total cost of revenues			36,997		38,501


	Research and development		29,314		26,842
	Selling and marketing		61,829		59,099
	General and administrative		17,586		15,784
Total operating expenses			145,726		140,226

Operating income			177,004		172,890
Financial income, net			8,842		10,462
Income before taxes on income			185,846		183,352
Taxes on income			37,886		39,726
Net income		$	147,960	$	143,626

Earnings per share (basic)		$	0.75	$	0.70
Number of shares used in computing earnings per share (basic)			198,459		206,114

Earnings per share (diluted)		$	0.73	$	0.68
Number of shares used in computing earnings per share (diluted)			202,594		212,469


CHECK POINT SOFTWARE TECHNOLOGIES LTD.
RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION

(In thousands, except per share amounts)

		Three Months Ended
		March 31,
		2013			2012
		(unaudited)			(unaudited)

GAAP operating income		$	177,004		$	172,890
Stock-based compensation (1)			11,170			9,785
Amortization of intangible assets (2)			922			4,004
Non-GAAP operating income		$	189,096		$	186,679

GAAP net income		$	147,960		$	143,626
Stock-based compensation (1)			11,170			9,785
Amortization of intangible assets (2)			922			4,004
Taxes on the above items (3)			(760	)		(503	)
Non-GAAP net income		$	159,292		$	156,912

GAAP Earnings per share (diluted)		$	0.73		$	0.68
Stock-based compensation (1)			0.06			0.05
Amortization of intangible assets (2)			-			0.02
Taxes on the above items (3)			-			(0.01	)

Non-GAAP Earnings per share (diluted)		$	0.79		$	0.74
Number of shares used in computing Non-GAAP earnings per share (diluted)			202,594			212,469
(1) Stock-based compensation:
	Cost of products and licenses	$	18		$	16
	Cost of software updates, maintenance and subscription		199			67
	Research and development		1,987			1,939
	Selling and marketing		2,260			2,089
	General and administrative		6,706			5,674
			11,170			9,785

(2) Amortization of intangible assets:
	Amortization of technology- Cost of revenues		294			2,858
	Selling and marketing		628			1,146
			922			4,004


(3) Taxes on the above items			(760	)		(503	)

Total, net		$	11,332		$	13,286


CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

ASSETS
	March 31,		December 31,
	2013		2012
	(unaudited)		(audited)
Current assets:
Cash and cash equivalents	$	252,771	$	574,802
Marketable securities and short-term deposits		1,132,310		928,535
Trade receivables, net		276,178		373,755
Prepaid expenses and other current assets		50,806		47,827
Total current assets		1,712,065		1,924,919

Long-term assets:
Marketable securities		2,138,310		1,792,027
Property and equipment, net		37,539		36,973
Severance pay fund		5,995		6,038
Deferred tax asset, net		26,093		25,553
Other intangible assets, net		18,289		19,211
Goodwill		727,875		727,875
Other assets		20,220		19,797
Total long-term assets		2,974,321		2,627,474

Total assets		4,686,386	$	4,552,393

LIABILITIES AND
SHAREHOLDERS' EQUITY

Current liabilities:
Deferred revenues	$	516,870		$	524,627
Trade payables and other accrued liabilities		411,361			346,568
Total current liabilities		928,231			871,195

Long-term deferred revenues		69,487			65,063
Income tax accrual		276,961			259,547
Deferred tax liability, net		1,788			-
Accrued severance pay		10,526			10,279
		358,762			334,889

Total liabilities		1,286,993			1,206,084

Shareholders' equity:
Share capital		774			774
Additional paid-in capital		711,142			693,212
Treasury shares at cost		(2,066,313	)		(1,955,328	)
Accumulated other comprehensive income		12,785			14,606
Retained earnings		4,741,005			4,593,045
Total shareholders' equity		3,399,393			3,346,309
Total liabilities and shareholders' equity	$	4,686,386		$	4,552,393
Total cash and cash equivalents, marketable securities and short-term deposits	$	3,523,391		$	3,295,364


CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW DATA

(In thousands)
	Three Months Ended
	March 31,
	2013			2012
	(unaudited)			(unaudited)
Cash flow from operating activities:
Net income	$	147,960		$	143,626
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment		2,016			1,952
Amortization of intangible assets		922			4,004
Stock-based compensation		11,170			9,785
Decrease in trade and other receivables, net		94,376			113,161
Realized loss (gain) on marketable securities		(1,114	)		62
Increase (decrease) in deferred revenues, trade payables and other accrued liabilities		83,496			(1,110	)
Excess tax benefit from stock-based compensation		(4,171	)		378
Deferred income taxes, net		(3,213	)		3,475
Net cash provided by operating activities		331,442			275,333

Cash flow from investing activities:
Investment in property and equipment		(2,582	)		(2,418	)
Net cash used in investing activities		(2,582	)		(2,418	)

Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options		26,645			39,554
Purchase of treasury shares		(131,637	)		(74,999	)
Excess tax benefit from stock-based compensation		4,171			(378	)
Net cash used in financing activities		(100,821	)		(35,823	)

Unrealized gain (loss) on marketable securities, net		(12	)		4,657

Increase in cash and cash equivalents and marketable securities		228,027			241,749

Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period		3,295,364			2,879,405
Cash and cash equivalents, marketable securities and short term deposits at the end of the period	$	3,523,391		$	3,121,154