FORM 6-K
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule
13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of July,
2004
Commission File Number 0-28584
| CHECK POINT SOFTWARE TECHNOLOGIES LTD. |
| (Translation of registrant’s name into English) |
| 3A Jabotinsky Street, Ramat-Gan 52520, Israel |
| (Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover 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 by furnishing the information contained in this Form, the registrant 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- ________
| INVESTOR RELATIONS CONTACT: | MEDIA RELATIONS CONTACT: |
| Janine Zanelli | Alison Wesley |
| Check Point Software Technologies | Check Point Software Technologies |
| 650-628-2040 | 650-628-2088 |
| ir@us.checkpoint.com | press@us.checkpoint.com |
CHECK
POINT SOFTWARE TECHNOLOGIES REPORTS SECOND QUARTER
FINANCIAL RESULTS
Achieves 24 Percent License Revenue Growth Over Second Quarter of 2003
REDWOOD CITY, Calif. – July 26, 2004 – Check Point Software Technologies Ltd. (NASDAQ: CHKP), the world leader in securing the Internet, today announced its financial results for the second quarter ended June 30, 2004. Revenues for the second quarter were $126.9 million, an increase of 20 percent compared to $106.1 million for the second quarter of 2003.
Net income and earnings per diluted share for the second quarter of 2004, including amortization of intangible assets and deferred stock compensation resulting from the acquisition of Zone Labs, were $63.3 million and $0.24 respectively.
Net income and earnings per diluted share, excluding the impact of the amortization of intangible assets and deferred stock compensation, net, were $65.9 million and $0.25, an increase of nine percent and five percent respectively, compared to $60.2 million and $0.24 in the second quarter of 2003.
Deferred revenues increased by $5.6 million in the second quarter to a record $130 million as of June 30, 2004, a 26 percent increase over deferred revenue in the quarter ended June 30, 2003.
The company generated cash flow from operating activities of $81.9 million, an increase of 21 percent compared to the quarter ended June 30, 2003. Another testament to the strong results was Days Sales Outstanding at 48 days, compared to 56 days in the quarter ended March 31, 2004. As part of the company’s share repurchase program, during the quarter the company purchased 3.3 million shares at a total cost of $78.6 million. Total cash and interest bearing investments as of June 30, 2004 were $1.59 billion.
“We are pleased with our financial and operating results this quarter, especially with the strong growth in product revenues, including 24 percent license revenue growth,” said Gil Shwed, chairman and CEO of Check Point Software Technologies. “Check Point’s organic growth, combined with the addition of our new consumer and enterprise endpoint security solutions, allowed us to achieve exceptional results against our key financial metrics. With our new products, customers can now address their dynamic and evolving Internet security challenges with a broad range of new and enhanced solutions. Check Point aims to provide a safe Internet business environment by protecting all points in the network – including Perimeter, Internal and Web.”
| Recent News Highlights Include: |
| l | Delivered Comprehensive Web Security Portfolio – Including Web Intelligence™, Connectra™ and SSL Network Extender™ that provide unmatched protection and integrity of customers’ entire Web infrastructures. The introduction of the Web security portfolio has been followed by strong interest from the channel and customers. |
| l | Introduced Prestigious Channel Program – Empowering worldwide solution provider partners to achieve greater success in selling Check Point solutions, the new Valued Partner Program provides expanded tools that enable partners to sell the most intelligent security solutions on the market. |
| l | Enhanced Endpoint Security Solutions – Integrity™ Clientless Security 2.0 was introduced for enterprises to safely secure SSL VPN and other emerging remote access technologies. ZoneAlarm Security Suite was introduced this quarter and met by strong demand from consumer and small business users. It offers the most complete security suite including personal firewall, antivirus, advanced application and security controls, identity and privacy protections, content and communication protections and email security. |
Mr. Shwed continued: “In the second quarter we completed the launch of our expanded security strategy with the shipment of our new Web security solutions. Over the past year we’ve expanded our security portfolio and added Perimeter, Internal, Web and endpoint security solutions, resulting in the broadest portfolio of network security solutions in our marketplace. With that expansion, our customers and partners can rely on Check Point to provide the best security and the only complete security architecture available today.”
Conference Call
Information
The Company will host a conference
call with the investment community on July 26, 2004 at 8:30 AM ET/5:30 AM PT. To listen to
the live Web cast, please visit Check Point’s Web site at
http://www.checkpoint.com/ir. A replay of the conference call will be available
through August 9, 2004, at the Company’s website or by telephone at (973) 341-3080,
confirmation code 4934212.
Safe Harbor Statement
Certain statements in this press
release 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 Check Point’s current expectations. Factors that could cause or
contribute to such differences include, but are not limited to: Check Point’s ability
to integrate Zone Lab’s operations effectively, the impact on revenues of economic
and political uncertainties and weaknesses in various regions of the world, including the
commencement or escalation of hostilities or acts of terrorism; the inclusion of network
security functionality in third-party hardware or system software; any 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; a shift in demand for products such as Check
Point’s; unknown factors affecting third parties with which Check Point has formed
business alliances; timely availability and customer acceptance of Check Point’s new
and existing products, and other factors and risks discussed in Check Point’s Report
on Form 20-F for the year ended December 31, 2003, which is on file with the Securities
and Exchange Commission. Check Point assumes no obligation to update information
concerning its expectations.
About Check Point
Software
Check Point Software Technologies
(www.checkpoint.com) is the worldwide leader in securing the Internet. It is the confirmed
market leader of both the worldwide VPN and firewall markets. Through its Next Generation
product line, the company delivers a broad range of intelligent Perimeter, Internal and
Web security solutions that protect business communications and resources for corporate
networks and applications, remote employees, branch offices and partner extranets. The
company’s Zone Labs (www.zonelabs.com) division is one of the most trusted brands in
Internet security, creating award-winning endpoint security solutions that protect
millions of PCs from hackers, spyware and data theft. Extending the power of the Check
Point solution is its Open Platform for Security (OPSEC), the industry’s framework
and alliance for integration and interoperability with “best-of-breed” solutions
from over 350 leading companies. Check Point solutions are sold, integrated and serviced
by a network of more than 2,300 Check Point partners in 92 countries.
©2004 Check Point Software Technologies Ltd. All rights reserved. Check Point, Application Intelligence, Check Point Express, the Check Point logo, ClusterXL, ConnectControl, Connectra, FireWall-1, FireWall-1 GX, FireWall-1 SecureServer, FireWall-1 XL, FloodGate-1, INSPECT, INSPECT XL, InterSpect, IQ Engine, Open Security Extension, OPSEC, Provider-1, Safe@Office, SecureKnowledge, SecurePlatform, SecureXL, SiteManager-1, SmartCenter, SmartCenter Pro, SmartDashboard, SmartDefense, SmartLSM, SmartMap, SmartUpdate, SmartView, SmartView Monitor, SmartView Reporter, SmartView Status, SmartViewTracker, SSL Network Extender, UAM, User-to-Address Mapping, UserAuthority, VPN-1, VPN-1 Accelerator Card, VPN-1 Edge, VPN-1 Pro, VPN-1 SecureClient, VPN-1 SecuRemote, VPN-1 SecureServer, VPN-1 VSX, Web Intelligence, TrueVector, ZoneAlarm, Zone Alarm Pro, Zone Labs, the Zone Labs logo, AlertAdvisor, Cooperative Enforcement, IMsecure, Policy Lifecycle Management, Zone Labs Integrity and Smarter Security 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, 5,835,726 and 6,496,935 and may be protected by other U.S. Patents, foreign patents, or pending applications.
CHECK POINT SOFTWARE
TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
2004 |
2003 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||
| Revenues: | ||||||||||||||
| Licenses | $ | 67,899 | $ | 54,778 | $ | 130,908 | $ | 113,032 | ||||||
| Subscriptions | 48,681 | 40,751 | 92,694 | 77,646 | ||||||||||
| Total product revenues | 116,580 | 95,529 | 223,602 | 190,678 | ||||||||||
| Services | 10,339 | 10,574 | 19,379 | 20,272 | ||||||||||
| Total revenues | 126,919 | 106,103 | 242,981 | 210,950 | ||||||||||
| Operating expenses: | ||||||||||||||
| Cost of revenues | 6,443 | 4,621 | 11,377 | 9,734 | ||||||||||
| Research and development | 10,844 | 7,263 | 19,506 | 14,121 | ||||||||||
| Selling and marketing | 34,417 | 26,768 | 63,015 | 53,456 | ||||||||||
| General and administrative | 6,474 | 4,581 | 11,324 | 8,925 | ||||||||||
| Amortization of intangible assets and deferred | ||||||||||||||
| stock compensation | 3,144 | - | 3,144 | - | ||||||||||
| Acquisition related in-process R&D | - | - | 23,098 | - | ||||||||||
| Total operating expenses | 61,322 | 43,233 | 131,464 | 86,236 | ||||||||||
| Operating income | 65,597 | 62,870 | 111,517 | 124,714 | ||||||||||
| Financial income, net | 10,579 | 10,497 | 21,348 | 21,840 | ||||||||||
| Income before income taxes | 76,176 | 73,367 | 132,865 | 146,554 | ||||||||||
| Income taxes | 12,913 | 13,189 | 27,674 | 26,297 | ||||||||||
| Net income | $ | 63,263 | $ | 60,178 | $ | 105,191 | $ | 120,257 | ||||||
| Net income excluding in-process R&D and amortization | ||||||||||||||
| of intangible assets and deferred stock compensation | $ | 65,865 | $ | 60,178 | $ | 130,891 | $ | 120,257 | ||||||
| Earnings per share (basic) | $ | 0.25 | $ | 0.24 | $ | 0.42 | $ | 0.49 | ||||||
| Number of shares used in computing earnings per share | ||||||||||||||
| (basic) | 254,778 | 247,221 | 252,484 | 246,738 | ||||||||||
| Earnings per share (fully diluted) | $ | 0.24 | $ | 0.24 | $ | 0.40 | $ | 0.47 | ||||||
| Earnings per share (fully diluted) excluding | ||||||||||||||
| in-process R&D and amortization of intangible assets | ||||||||||||||
| and deferred stock compensation | $ | 0.25 | $ | 0.24 | $ | 0.50 | $ | 0.47 | ||||||
| Number of shares used in computing earnings per share | ||||||||||||||
| (fully diluted) | 266,800 | 255,199 | 263,315 | 254,197 | ||||||||||
CHECK POINT SOFTWARE
TECHNOLOGIES LTD.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
ASSETS
| June 30, 2004 |
December 31, 2003 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | |||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | $ | 231,077 | $ | 327,188 | ||||||
| Marketable securities and deposits | 850,463 | 809,158 | ||||||||
| Trade receivables, net | 71,192 | 72,754 | ||||||||
| Other receivables and prepaid expenses | 23,340 | 19,667 | ||||||||
| Total current assets | 1,176,072 | 1,228,767 | ||||||||
| Long-term assets: | ||||||||||
| Long-term investments | 512,439 | 467,264 | ||||||||
| Property and equipment, net | 8,677 | 7,394 | ||||||||
| Intangible assets | 28,678 | - | ||||||||
| Goodwill | 172,528 | - | ||||||||
| Deferred income taxes | 20,526 | 5,519 | ||||||||
| Total long-term assets | 742,848 | 480,177 | ||||||||
| Total assets | $ | 1,918,920 | $ | 1,708,944 | ||||||
| LIABILITIES AND | ||||||||||
| SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Deferred revenues | $ | 129,971 | $ | 105,889 | ||||||
| Trade payables and other accrued liabilities | 140,450 | 139,345 | ||||||||
| Total current liabilities | 270,421 | 245,234 | ||||||||
| Accrued severance pay, net | 2,587 | 2,165 | ||||||||
| Deferred tax liability | 8,428 | - | ||||||||
| Total liabilities | 281,436 | 247,399 | ||||||||
| Shareholders' Equity: | ||||||||||
| Share capital | 755 | 747 | ||||||||
| Additional paid-in capital | 357,452 | 193,662 | ||||||||
| Deferred stock based compensation | (14,401 | ) | - | |||||||
| Treasury shares | (78,649 | ) | - | |||||||
| Retained earnings | 1,372,327 | 1,267,136 | ||||||||
| Total shareholders' equity | 1,637,484 | 1,461,545 | ||||||||
| Total liabilities and shareholders' equity | $ | 1,918,920 | $ | 1,708,944 | ||||||
| Total cash and cash equivalents, deposits and | ||||||||||
| marketable securities | 1,592,767 | 1,602,724 | ||||||||
CHECK POINT SOFTWARE TECHNOLOGIES
LTD.
SELECTED CONSOLIDATED CASH FLOW DATA
(In thousands)
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
2004 |
2003 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||
| Cash flow from operating activities: | ||||||||||||||
| Net income | 63,263 | 60,178 | 105,191 | 120,257 | ||||||||||
| Adjustments to reconcile net income to net cash provided by | ||||||||||||||
| operating activities: | ||||||||||||||
| Depreciation and amortization | 1,424 | 1,400 | 2,681 | 2,997 | ||||||||||
| Decrease (increase) in trade and other receivables, net | 8,986 | (2,395 | ) | 963 | 10,372 | |||||||||
| Increase in trade payables and other accrued liabilities | 4,785 | 6,052 | 9,044 | 2,203 | ||||||||||
| Other adjustments | 289 | 2,416 | 2,444 | 8,773 | ||||||||||
| Amortization of intangible assets and deferred stock | ||||||||||||||
| compensation | 3,144 | - | 3,144 | - | ||||||||||
| Acquisition related in-process R&D | - | - | 23,098 | - | ||||||||||
| Net cash provided by operating activities | 81,891 | 67,651 | 146,565 | 144,602 | ||||||||||
| Cash flow from investing activities: | ||||||||||||||
| Cash paid in conjunction with the acquisition of Zone Labs, net | - | - | (95,343 | ) | - | |||||||||
| Investment in property and equipment | (966 | ) | (997 | ) | (2,327 | ) | (1,634 | ) | ||||||
| Net cash used in investing activities | (966 | ) | (997 | ) | (97,670 | ) | (1,634 | ) | ||||||
| Cash flow from financing activities: | ||||||||||||||
| Proceeds from issuance of shares upon exercise of options | 8,545 | 6,447 | 19,797 | 9,613 | ||||||||||
| Purchase of treasury shares | (78,649 | ) | - | (78,649 | ) | - | ||||||||
| Net cash provided by (used in) financing activities | (70,104 | ) | 6,447 | (58,852 | ) | 9,613 | ||||||||
| Increase (decrease) in cash and cash equivalents, deposits | ||||||||||||||
| and marketable securities | 10,821 | 73,101 | (9,957 | ) | 152,581 | |||||||||
| Cash and cash equivalents, deposits and marketable | ||||||||||||||
| securities at the beginning of the period | 1,581,946 | 1,394,232 | 1,602,724 | 1,314,752 | ||||||||||
| Cash and cash equivalents, deposits and marketable | ||||||||||||||
| securities at the end of the period | 1,592,767 | 1,467,333 | 1,592,767 | 1,467,333 | ||||||||||
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 Chief Financial Officer |
July 26, 2004