Home Page | Skip to Navigation | Skip to Content | Skip to Search | Skip to Footer

Check Point Software Technologies Ltd. Reports Financial Results for the Second Quarter 2001

REDWOOD CITY, Calif. - July 23, 2001 - Check PointT Software Technologies Ltd. (Nasdaq: CHKP), the worldwide leader in securing the Internet, today announced financial results for the second quarter ended June 30, 2001.

Net income for the quarter was $86.8 million or $0.33 per share (diluted), an increase of 99% and 101% respectively over the same period last year. Revenues for the quarter were $142.1 million, an increase of 57% over the second quarter of last year.

The company generated positive cash flow of $101.5 million in the second quarter, bringing the total cash and interest bearing investments to $866.0 million as of June 30, 2001.

"I'm pleased with our solid financial results," said Gil Shwed, chairman and chief executive officer, Check Point Software Technologies. "We significantly increased our revenue and earnings, and continued to win in the marketplace, a testament to the strength of Check Point's products."

Second quarter highlights include:

  • Check Point Next Generation - Launched Check Point NG, the company's next major version of its flagship products which began shipping in July. These state-of-the-art Virtual Private Networking (VPN) solutions are designed to bring VPNs mainstream by enabling highly scalable, easy to manage, secure and extremely cost-effective communications.

  • Expanded VPN Market Leadership - According to research conducted by Datamonitor, Check Point increased its worldwide market share in 2000 from 52% to 62%.

  • Delivered Multi-Gigabit Firewall Throughput - Set an industry benchmark for firewall throughput and established a gigabit VPN platform with the introduction of the "Secured by Check Point" Nokia IP740 security appliance, capable of delivering over 1.5 gigabits per second of secure firewall throughput.

  • Extended Partnerships - Introduced the jointly developed Compaq "Secured by Check Point" appliances with Compaq's ML3320 and DL320 solutions. 
    Also announced partnerships with CoSine Communications, Crossbeam Systems and Cubix Corporation to address the subscriber VPN/security solutions market.

  • Check Point Experience Internet Security Conference and OPSEC Expo - Record attendance of over 2,500 of Check Point's top partners and customers in four Check Point Experience conferences held in Paris, Singapore, Sydney and Hong Kong.

  • Industry Awards & Accolades - In its IT Technology 100 issue, BusinessWeek ranked Check Point the number one software company in the world, number 10 out of 100 of the best performing IT companies in any category, and one of the industry's most profitable companies. Additionally, Network Magazine named Check Point's market-leading VPN-1 "Product of the Year" and Network Computing recognized Check Point's Open Platform for Security (OPSEC) Alliance with its "Well-Connected" award in the category of Enterprise Security Framework.

"With the Check Point NG product suite, Check Point developers continued to raise the bar for VPN technology," Mr. Shwed continued. "The most important technology we've ever delivered, Check Point Next Generation, enables end to end security by making it more open, manageable and easy to deploy, helping our customers to significantly decrease their communication costs. We are excited about the prospects it will bring to Check Point, our customers and the industry at large." 

Conference Call Information
The Company will host a conference call with the investment community on July 23, 2001 at 5:30 AM PT/8:30 AM ET. For information on the LIVE webcast and audio replay of the call, please visit Check Point's web site at http://www.checkpoint.com/ir. A replay of the conference call will be available through August 6, 2001, at the Company's website or by telephone at (719) 457-0820, confirmation code 650483.

Safe Harbor Statement 
Statements in this press release such as the prospects for and customers' acceptance of Check Point NG are forward-looking statements. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results could differ materially from the company's current expectations. Factors that could cause or contribute to such differences include, but are not limited to: the impact on revenues of economic uncertainties and weaknesses in geographic regions of the world; the inclusion of network security functionality in third-party hardware or system software; any unforeseen developmental or technological difficulties with regard to our products; changes in the competitive landscape including new competitors and/or the impact of competitive pricing and products; a shift in demand for products such as ours; unknown factors effecting the third parties with whom we have formed business alliances; timely availability and customer acceptance of new and existing products, and other factors and risks discussed in our Report on Form 20-F for the year ended December 31, 2000, which has been filed with the Securities and Exchange Commission. The company assumes no obligation to update information concerning its expectations.

About Check Point Software Technologies 
Check Point Software Technologies is the worldwide leader in securing the Internet. The company's Secure Virtual Network (SVN) architecture provides the infrastructure that enables secure and reliable Internet communications. SVN secures business-to-business (B2B) communications between networks, systems, applications and users across the Internet, Intranets and extranets. Check Point's Open Platform for Security (OPSEC) provides the framework for integration and interoperability with "best-of-breed" solutions from over 270 leading industry partners. Check Point solutions are sold, integrated and serviced by a network of over 1500 certified partners. For more information, please call us at (800) 429-4391 or (650) 628-2000 or visit us on the Web at http://www.checkpoint.com or at http://www.opsec.com.


2001 Check Point Software Technologies Ltd. All rights reserved. Check Point, the Check Point logo, FireWall-1, FireWall-1 SecureServer, FloodGate-1, INSPECT, IQ Engine, MetaInfo, Meta IP, Open Security Extension, OPSEC, Provider-1, SecureKnowledge, SiteManager, SVN, UAM, UserAuthority, VPN-1, VPN-1 Accelerator Card, VPN-1 Appliance, VPN-1 Certificate Manager, VPN-1 Gateway, VPN-1 SecureClient, VPN-1 SecuRemote, VPN-1 SecureServer and ConnectControl are trademarks or registered trademarks of Check Point Software Technologies Ltd. or its affiliates. All other product names mentioned herein are trademarks or registered trademarks of their respective owners. The products described in this document are protected by U.S. Patent No. 5,606,668 and 5,835,726 and may be protected by other U.S. Patents, foreign patents, or pending applications. Internet Security Systems, RealSecure, SAFEsuite and ePatrol are trademarks of Internet Security Systems, Inc. and ISS Group, Inc.


CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amount)
       

Three Months Ended

  

Six Months Ended
       

June 30,

  

June 30,
       

2001

2000

  

2001

2000
       

(unaudited)

  

(unaudited)
                 

Revenues

      

$142,071

$90,668

  

$287,081

$168,834

Cost of revenues

      

6,464

8,006

  

16,542

15,650

Gross profit

      

135,607

82,662

  

270,539

153,184

  Operating expenses:

              

Research and development, net

    

9,049

6,659

  

18,369

12,834

Sales and marketing

    

28,714

27,733

  

59,096

51,951

General and administrative

    

6,145

4,502

  

12,683

9,701

Total operating expenses

    

43,908

38,894

  

90,148

74,486
                 

Operating income

      

91,699

43,768

  

180,391

78,698

Financial income, net

    

11,574

6,411

  

21,675

11,905

Income before taxes on income

    

103,273

50,179

  

202,066

90,603

Taxes on income

  

16,472

6,508

  

31,587

12,053
                

Net income

   

$86,801

$43,671

  

$170,479

$78,550
 

Basic net earnings per share

  

$0.36

$0.19

  

$0.72

$0.34

Number of shares used in computing
basic net earnings per share

  

  239,202

  231,663

  

  238,044

231,029

  Diluted net earnings per share

  

  $0.33

  $0.17

  

  $0.66

  $0.30

Number of shares used in computing diluted net earnings per share

  

  260,440

  263,637

  

  259,879

  263,311


CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED BALANCE SHEET DATA
Assets: (In thousands)
 

June
30, 2001

  

December
31,2000

Assets:

    

  (unaudited)

 

  (audited)

Cash & cash equivalents, short term deposits and marketable securities

  

  $866,023

  

  $655,952

Trade receivables, net

    

86,889

  

84,381

Other receivables and prepaid expenses

18,608

  

17,637
             

Long term investments and other

  

2,059

  

2,512
 

Net property and equipment

  

12,879

  

11,638

Deferred income taxes

  

5,702

  

5,519

Total assets

      

$992,160

  

$777,639

LIABILITIES AND SHAREHOLDERS' EQUITY

Deferred revenues

$109,647

$121,202

Trade payables and other accrued liabilities

130,520

105,988

Total liabilities

240,167

227,190

Accrued severance pay

1,977

1,166

Share capital

731

482

Additional paid-in capital

111,949

87,104

Capital fund

20,600

15,440

Retained earnings

616,736

446,257

Total shareholders' equity

750,016

549,283

Total liabilities and shareholders' equity

$992,160

$777,639