Forwarded From: "Spencer, Will" <wspencert_private> Check Point Software Technologies Ltd. Reports Record First Quarter Results (PR Newswire; 04/22/98) REDWOOD CITY, Calif., April 22 /PRNewswire/ Check Point Software Technologies Ltd. (Nasdaq: CHKPF) today announced record financial results for the first quarter ended March 31, 1998. Revenues for the quarter were $30,857,000, compared to $13,684,000 for the same period in 1997, an increase of 125%. Net income for the quarter was $15,526,000, or $0.41 per share (on a fully-diluted basis), compared to net income of $6,473,000, or $0.17 per share in the same quarter in 1997, an increase of 140% in net income and 141% in net income per share. "We are very pleased with the overall results of the first quarter," said Gil Shwed, president and CEO of Check Point Software Technologies Ltd. "During the quarter, Check Point's leadership and momentum in enabling customers to implement secure, reliable and manageable business communications continued. The company's overall installed base grew to over 45,000 units worldwide, and more than 6,500 networks are now using Check Point's VPN solution." "Increasingly, we are seeing customers adopting Check Point's enterprise solutions, including our open platform approach to policy-based management based on the OPSEC framework, and our comprehensive, enterprise approach to VPNs. These are becoming the primary drivers of Check Point's business," continued Shwed. "In particular, the number of customers implementing remote access, Intranet and Extranet VPNs as part of their overall enterprise networking strategy continues to increase substantially each quarter." A prime example is the Automotive Network eXchange (ANX) network, potentially the world's largest VPN, developed by and for vehicle manufacturers and suppliers, such as Chrysler, Ford and General Motors. Recently, Check Point was selected as a supplier of VPN capabilities to the ANX. In the first quarter, Check Point announced a strategic initiative to deliver the most comprehensive VPN solutions on the market, encompassing a full suite of security applications, traffic control (including bandwidth management and hardware acceleration) and enterprise management. As part of this initiative, the company inked OEM deals with Entrust Technologies for Certificate Authorities/Public Key Infrastructure (CA/PKI) software and Chrysalis-ITS for hardware encryption acceleration. Additional partnerships created in the first quarter include more than 30 new members in the company's OPSEC(TM) (Open Platform for Secure Enterprise Connectivity) Alliance. These new members include several managed service providers such as CompuServe Networks, GTE Internetworking, and MCI, and solutions vendors such as NextPoint Networks, SurfWatch, Tivoli Systems, Trend Micro, and WorldTalk. Membership in the OPSEC Alliance now stands at more than 130 companies, with 57 OPSEC Certified and OPSEC Secured solutions shipping today. Check Point continued the balanced diversification of its distribution channels across ISPs, OEMs, systems integrators, distributors and VARs. Nine of the top ten ISPs in North America delivering managed service offerings to their business customers now offer Check Point for the enterprise security and VPN portion of their offering. In the first quarter, the company added America On-Line's AOL Enterprise to the list of managed service providers selecting FireWall-1. OEM revenues, including revenues from SunSoft, Inc., accounted for 19% of overall revenues in the fourth quarter, with SunSoft, Inc. accounting for 13% of revenues. Check Point also continued solid geographic diversification and opened a Middle East regional office in the first quarter, bringing the company's total offices to twenty-four in nine countries worldwide. Fifty-one percent of all channel bookings in the first quarter came from outside the Americas, with Japan experiencing a seasonally-strong, record quarter. The company continued its history of award-winning products with reviews lauding the products' security, reliability, flexibility, and manageability from trade publications including Computer Reseller News, Data Communications, Network Magazine, and Network Computing. After the close of the quarter, the company acquired MetaInfo, Inc., a leading provider of IP address management solutions, which brings the company one step further in realizing its vision of secure, reliable, and manageable business communications over IP networks. "We're very excited about the acquisition of MetaInfo, which not only brings important new products in the area of enterprise infrastructure management to Check Point, but also provides key enabling technology for our security and traffic management lines," said Deborah Triant, president and CEO of Check Point Software Technologies, Inc. "Central, policy-based management of all critical network functions, including security, traffic management, and the network infrastructure, is not only what the industry agrees is the 'holy grail,' it's what Check Point is delivering today." About CHECK POINT Software Technologies Ltd. Check Point Software Technologies Ltd. is a leading provider of policy- based management solutions for active networks. Through its Secure Enterprise Connectivity strategy, the company is dedicated to enabling secure, reliable, and manageable business communications over IP networks. The company's products include the world's leading enterprise security and Virtual Private Network (VPN) suite, FireWall-1(R), and the industry's premier bandwidth management solution, FloodGate-1(TM). MetaInfo, Inc., a wholly- owned subsidiary of Check Point, is a leader in network and IP address management software that simplifies the set-up, integration and administration of complex networks. The company has U.S. headquarters in Redwood City, California and international headquarters in Ramat-Gan, Israel. For product information, visit our web site at http://www.checkpoint.com. All of the statements contained in this press release that are not historical 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 inclusion of network security functionality in hardware or system software, changes in the competitive landscape including new competitors and/or the impact of competitive pricing and products, dependence upon a limited number of key resellers, dependence upon a limited number of product lines, timely availability and customer acceptance of new and existing products, the failure to manage growth, the benefit to the company of recent and potential acquisitions, and other factors and risks discussed in the company's registration statement on Form F-1 dated May 6, 1997 and the other reports filed from time to time with the Securities and Exchange Commission including the company's annual report on Form 20-F. NOTE: Check Point, the Check Point logo, FireWall-1, FireWall-1 SecuRemote, FireWall-First!, OPSEC, INSPECT, UAP, FloodGate-1 and IQ Engine are trademarks or registered trademarks of Check Point Software Technologies Ltd. Meta IP and Meta DNS are trademarks of MetaInfo, Inc. All other product names mentioned herein are trademarks of their respective owners. CHECK POINT SOFTWARE TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share amount) Three Months Ended March 31 Unaudited 1998 1997 Revenues, net 30,857 13,684 Cost of revenues 2,573 1,004 Gross profit 28,284 12,680 Operating expenses: Research and development, net.. 2,390 1,012 Sales and marketing 8,503 4,078 General and administrative 2,238 1,453 Total operating expenses 13,131 6,543 Operating income 15,153 6,137 Financial income, net 1,184 791 Income before income taxes 16,337 6,928 Income taxes 811 305 15,526 6,623 Equity losses related to affiliates 0 150 Net income 15,526 6,473 Earnings per share (Basic) 0.45 0.20 Number of shares used in computing earnings per share (Basic) 34,477 32,755 Earnings per share (Fully diluted) 0.41 0.17 Number of shares used in computing earnings per share (Fully diluted) 38,030 37,138 ..Net of participation by the chief scientist 108 75 CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED CONSOLIDATED BALANCE SHEET DATA (In thousands) ASSETS March 31, December 31, 1998 1997 Current Assets: Cash & cash equivalents 11,735 5,423 Short term deposits 32,292 33,046 Marketable securities 26,581 26,777 Trade receivables, net 19,387 14,629 Other receivables and prepaid expenses 6,092 4,546 Total current assets 96,087 84,421 Long term investments 44,956 36,135 Net property and equipment 4,219 2,797 Severance pay fund 536 477 Deferred Income Taxes 46 30 145,844 123,860 LIABILITIES AND SHAREHOLDER'S EQUITY Total current liabilities 27,904 22,975 Accrued Severance Pay 821 701 Total shareholders' equity 117,119 100,184 145,844 123,860 SOURCE Check Point Software Technologies Ltd. Web site: http://www.checkpoint.com/ -o- Subscribe: mail majordomot_private with "subscribe isn". Today's ISN Sponsor: Dimensional Communications (www.dim.com)
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