UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule
13a-16 or 15d-16
of the Securities
Exchange Act of 1934
For the month of April, 2008
Commission File Number 0-28584
| CHECK POINT SOFTWARE TECHNOLOGIES LTD. |
| (Translation of registrant's name into English) |
5 Ha'solelim Street, Tel Aviv, Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information contained in this Form, is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
FOR IMMEDIATE RELEASE
| INVESTOR CONTACT: | MEDIA CONTACT: |
| Kip E. Meintzer | Greg Kunkel |
| Check Point Software Technologies | Check Point Software Technologies |
| +1 650.628.2040 | +1 650.628.2070 |
| ir@us.checkpoint.com | press@us.checkpoint.com |
CHECK POINT SOFTWARE REPORTS FINANCIAL RESULTS FOR THE FIRST QUARTER 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.2 |
| 1 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. |
| 2 “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. |
| — | 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. |
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.”
Conference Call and
Webcast Information
Check Point will host a conference
call with the investment community on April 17, 2008 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 1, 2008 at the company’s website http://www.checkpoint.com/ir or by
telephone at +1.706.645.9291, pass code # 42045610.
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 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, statements related to Check Point’s expectations that it will continue to
deliver comprehensive security solutions that address the information security needs of
its customers, and that Check Point will continue to seek to become the security vendor of
chose throughout the enterprise. 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 the Check Point’s industry; economic and political uncertainties; 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,
2007, which is on file with the Securities and Exchange Commission. Check Point assumes no
obligation to update information concerning its expectations or beliefs.
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended |
||||||||
|---|---|---|---|---|---|---|---|---|
| March 31, |
||||||||
| 2008 |
2007 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenues: | ||||||||
| Products and licenses | $ | 77,379 | $ | 66,048 | ||||
| Software updates, maintenance and services | 114,218 | 97,921 | ||||||
| Total revenues | 191,597 | 163,969 | ||||||
| Operating expenses: | ||||||||
| Cost of products and licenses | 8,993 | 5,240 | ||||||
| Cost of software updates, maintenance and | ||||||||
| services | 6,750 | 5,458 | ||||||
| Amortization of technology | 7,154 | 6,262 | ||||||
| Total cost of revenues | 22,897 | 16,960 | ||||||
| Research and development | 22,745 | 18,868 | ||||||
| Selling and marketing | 53,660 | 52,162 | ||||||
| General and administrative | 13,566 | 14,100 | ||||||
| Acquired in-process research and development | - | 17,000 | ||||||
| Total operating expenses | 112,868 | 119,090 | ||||||
| Operating income | 78,729 | 44,879 | ||||||
| Financial income, net | 14,620 | 13,068 | ||||||
| Income before income taxes | 93,349 | 57,947 | ||||||
| Taxes on income | 15,091 | 10,999 | ||||||
| Net income | 78,258 | 46,948 | ||||||
| Earnings per share (basic) | 0.36 | 0.21 | ||||||
| Number of shares used in computing earnings per | ||||||||
| share (basic) | 217,065 | 224,917 | ||||||
| Earnings per share (diluted) | 0.36 | 0.21 | ||||||
| Number of shares used in computing earnings per | ||||||||
| share (diluted) | 219,393 | 227,691 | ||||||
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
RECONCILIATION OF SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, except per share amounts)
| Three Months Ended |
||||||||
|---|---|---|---|---|---|---|---|---|
| March 31, |
||||||||
| 2008 |
2007 | |||||||
| (unaudited) | (unaudited) | |||||||
| GAAP operating income | $ | 78,729 | $ | 44,879 | ||||
| Stock-based compensation (1) | 9,071 | 8,338 | ||||||
| Amortization of intangible assets (2) | 10,304 | 8,970 | ||||||
| Acquired in-process research and development | - | 17,000 | ||||||
| Non-GAAP operating income | 98,104 | 79,187 | ||||||
| GAAP net income | 78,258 | 46,948 | ||||||
| Stock-based compensation (1) | 9,071 | 8,338 | ||||||
| Amortization of intangible assets (2) | 10,304 | 8,970 | ||||||
| Acquired in-process research and development | - | 17,000 | ||||||
| Taxes on stock-based compensation and amortization of | ||||||||
| intangible assets (3) | (4,264 | ) | (2,647 | ) | ||||
| Non-GAAP net income | 93,369 | 78,609 | ||||||
| GAAP Earnings per share (diluted) | 0.36 | 0.21 | ||||||
| Stock-based compensation (1) | 0.04 | 0.04 | ||||||
| Amortization of intangible assets (2) | 0.05 | 0.04 | ||||||
| Acquired in-process research and development | - | 0.07 | ||||||
| Taxes on stock-based compensation and amortization of | ||||||||
| intangible assets (3) | (0.02 | ) | (0.01 | ) | ||||
| Non-GAAP Earnings per share (diluted) | 0.43 | 0.35 | ||||||
| Number of shares used in computing Non-GAAP earnings per share | ||||||||
| (diluted) | 219,393 | 227,691 | ||||||
| (1) Stock-based compensation: | ||||||||
| Cost of products and licenses | 12 | 11 | ||||||
| Cost of software updates, maintenance and services | 183 | 117 | ||||||
| Research and development | 1,097 | 1,010 | ||||||
| Selling and marketing | 2,240 | 1,721 | ||||||
| General and administrative | 5,539 | 5,479 | ||||||
| Total before taxes | 9,071 | 8,338 | ||||||
| (2) Amortization of intangible assets: | ||||||||
| Cost of products and licenses | 7,154 | 6,262 | ||||||
| Selling and marketing | 3,150 | 2,708 | ||||||
| Total before taxes | 10,304 | 8,970 | ||||||
| (3) Taxes on stock-based compensation and amortization of | ||||||||
| intangible assets | (4,264 | ) | (2,647 | ) | ||||
| Total, net | 15,111 | 14,661 | ||||||
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
| March 31, 2008 |
December 31, 2007 | |||||||
|---|---|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 607,360 | $ | 509,664 | ||||
| Marketable securities | 252,874 | 332,355 | ||||||
| Trade receivables, net | 150,365 | 201,515 | ||||||
| Other current assets | 26,758 | 21,595 | ||||||
| Total current assets | 1,037,357 | 1,065,129 | ||||||
| Long-term assets: | ||||||||
| Marketable securities | 458,472 | 399,490 | ||||||
| Property, plant and equipment, net | 56,693 | 56,947 | ||||||
| Severance pay fund | 10,798 | 9,302 | ||||||
| Deferred income taxes, net | 14,994 | 14,920 | ||||||
| Intangible assets, net | 149,829 | 160,133 | ||||||
| Goodwill | 664,602 | 664,910 | ||||||
| Other assets | 695 | 636 | ||||||
| Total long-term assets | 1,356,083 | 1,306,338 | ||||||
| Total assets | 2,393,440 | 2,371,467 | ||||||
| LIABILITIES AND | ||||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Deferred revenues | $ | 278,430 | $ | 273,693 | ||||
| Trade payables and other accrued liabilities | 99,248 | 116,406 | ||||||
| Total current liabilities | 377,678 | 390,099 | ||||||
| Income tax accrual | 84,799 | 78,545 | ||||||
| Deferred tax liability, net | 29,155 | 31,465 | ||||||
| Accrued severance pay | 16,650 | 14,403 | ||||||
| Total liabilities | 508,282 | 514,512 | ||||||
| Shareholders' equity: | ||||||||
| Share capital | 774 | 774 | ||||||
| Additional paid-in capital | 480,575 | 464,330 | ||||||
| Treasury shares at cost | (972,856 | ) | (907,022 | ) | ||||
| Accumulated other comprehensive income | 767 | 1,233 | ||||||
| Retained earnings | 2,375,898 | 2,297,640 | ||||||
| Total shareholders' equity | 1,885,158 | 1,856,955 | ||||||
| Total liabilities and shareholders' equity | 2,393,440 | 2,371,467 | ||||||
| Total cash and cash equivalents and marketable | 1,318,706 | 1,241,509 | ||||||
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW DATA
(In thousands)
| Three Months Ended |
||||||||
|---|---|---|---|---|---|---|---|---|
| March 31, |
||||||||
| 2008 |
2007 | |||||||
| (unaudited) | (unaudited) | |||||||
| Cash flow from operating activities: | ||||||||
| Net income | $ | 78,258 | $ | 46,948 | ||||
| Adjustments to reconcile net income to net cash provided by | ||||||||
| operating activities: | ||||||||
| Depreciation and amortization of property and equipment | 2,189 | 1,237 | ||||||
| Decrease in trade and other receivables, net | 48,126 | 38,561 | ||||||
| Increase (decrease) in deferred revenues, trade payables and | ||||||||
| other accrued liabilities | 3,331 | (5,786 | ) | |||||
| Acquisition of in process research and development | - | 17,000 | ||||||
| Amortization of intangible assets | 10,304 | 8,970 | ||||||
| Stock-based compensation | 9,071 | 8,338 | ||||||
| Excess tax benefit from stock-based compensation | (3,348 | ) | - | |||||
| Deferred income taxes, net | (5,055 | ) | (5,260 | ) | ||||
| Net cash provided by operating activities | 142,876 | 110,008 | ||||||
| Cash flow from investing activities: | ||||||||
| Cash paid in conjunction with the acquisition of Protect Data, | ||||||||
| net | - | (594,034 | ) | |||||
| Purchase of property and equipment | (1,935 | ) | (4,422 | ) | ||||
| Net cash used in investing activities | (1,935 | ) | (598,456 | ) | ||||
| Cash flow from financing activities: | ||||||||
| Proceeds from issuance of shares under stock purchase plan and | ||||||||
| upon exercise of options | 6,468 | 7,517 | ||||||
| Purchase of treasury shares at cost | (73,000 | ) | (55,627 | ) | ||||
| Excess tax benefit from stock-based compensation | 3,348 | - | ||||||
| Net cash used in financing activities | (63,184 | ) | (48,110 | ) | ||||
| Unrealized gain (loss) on marketable securities, net | (560 | ) | 8,126 | |||||
| Increase (decrease) in cash and cash equivalents and | ||||||||
| marketable securities | 77,197 | (528,432 | ) | |||||
| Cash and cash equivalents and marketable securities at the | ||||||||
| beginning of the period | 1,241,509 | 1,649,938 | ||||||
| Cash and cash equivalents and marketable securities at the end | ||||||||
| of the period | 1,318,706 | 1,121,506 | ||||||
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CHECK POINT SOFTWARE TECHNOLOGIES LTD. By: /s/ Eyal Desheh —————————————— Eyal Desheh Executive Vice President & Chief Financial Officer |
April 17, 2008