Check Point Software Reports Record First Quarter Financial Results
Growth in revenues and earnings with revenues of $195M, non-GAAP EPS of $0.45 and cash flow from operations of $172M
Redwood City, CA — 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.”
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.
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