zk1212129.htm



     

 
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 October 2012
 
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- ________
 
       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  1
 
 

 

     
 
INVESTOR CONTACT: 
Kip E. Meintzer  
Check Point Software Technologies
+1.650.628.2040       
ir@checkpoint.com  
MEDIA CONTACT:
James Rivas
Check Point Software Technologies  
+1.650.628.2215
press@checkpoint.com
 
CHECK POINT SOFTWARE TECHNOLOGIES REPORTS 2012 THIRD QUARTER FINANCIAL RESULTS

SAN CARLOS, CA – October 17, 2012 — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced its financial results for the third quarter ended September 30, 2012.
 
 
·
Total Revenue: $332.4 million, representing an 8 percent increase year-over-year
 
·
Non-GAAP Operating Income: $195.6 million, representing 59 percent of revenues
 
·
Non-GAAP EPS: $0.79, representing a 10 percent increase year over year
 
“Third quarter results continued to be good with healthy growth in enterprise appliance units and software blade sales. Our revenues and earnings per share came in at the upper half of our projections.” said Gil Shwed, founder, chairman, and chief executive officer of Check Point Software Technologies. “Geographically, North America continued to deliver great results with double digit growth in product and service revenues.”
 
Financial Highlights:
 
·
Total Revenue: $332.4 million, an increase of 8 percent, compared to $308.3 million in the third quarter of 2011.
·
GAAP Operating Income: $182.6 million, an increase of 15 percent, compared to $158.2 million in the third quarter of 2011. GAAP operating margin was 55 percent, compared to 51 percent in the third quarter of 2011.
·
Non-GAAP Operating Income: $195.6 million, an increase of 8 percent, compared to $180.7 million in the third quarter of 2011. Non-GAAP operating margin was 59 percent, the same as in the third quarter of 2011.
·
GAAP Net Income and Earnings per Diluted Share: GAAP net income was $152.4 million, an increase of 14 percent, compared to $134.1 million in the third quarter of 2011. GAAP earnings per diluted share were $0.73, an increase of 16 percent, compared to $0.63 in the third quarter of 2011.
·
Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $164.1 million, an increase of 7 percent, compared to $152.9 million in the third quarter of 2011. Non-GAAP earnings per diluted share were $0.79, an increase of 10 percent, compared to $0.72, in the third quarter of 2011.
·
Deferred Revenues: As of September 30, 2012, we had deferred revenues of $505.9 million, an increase of 11 percent, compared to $454.5 million as of September 30, 2011.
·
Cash Flow: Cash flow from operations was $180.4 million, an increase of 17%, compared to $154.5 million in the third quarter of 2011.
·
Share Repurchase Program: During the third quarter of 2012, we repurchased 3.2 million shares at a total cost of $156.1 million.
·
Cash Balances, Marketable Securities and Short Term Deposits: $3,246.8 million as of September 30, 2012, an increase of $470.3 million, compared to $2,776.5 million as of September 30, 2011.

For information regarding the Non-GAAP financial measures discussed in this release, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  2
 
 

 
 
     
 
Business Highlights
 
During the quarter, we announced the new Check Point Virtual Systems - Latest solution for private cloud environments and data centers enabling the consolidation of up to 250 security gateways on a single hardware platform. Customers can now secure multiple network segments by selecting any combination of Check Point software blades, which are capable of simplifying security, reducing costs and boosting performance.
 
We’ve continued to receive industry recognition worldwide including:
 
Top Position in IDC Worldwide Combined Firewall and UTM Appliance MarketCheck Point is positioned as the number one vendor in worldwide combined Firewall and UTM appliance revenue for Q2 2012 according to the IDC Worldwide Q2 2012 Security Appliance Tracker.

Leader in Gartner’s Magic Quadrant for Mobile Data Protection – Check Point is positioned as a leader in Gartner’s Magic Quadrant for Mobile Data Protection, 2012. The company is recognized for its ability to encrypt data and secure mobile endpoints.

NSS Labs “Recommended” Rating Check Point IPS Software Blade earned NSS Labs’ coveted “Recommended” rating for the second year in a row.
 
Shwed concluded, “We are pleased with IDC’s recognition of Check Point’s number one position in security appliance sales this past quarter.  We believe that with our appliances and software blades architecture we deliver the deepest and broadest security solutions available in the market.”

Fourth Quarter 2012 Investor Conference Participation Schedule:

·
Wells Fargo Securities Media & Technology Conference
 
November 7, 2012 – New York, NY
 
·
UBS Global Technology Conference
 
November 15, 2012 – New York, NY
 
·
Credit Suisse Annual Technology Conference
 
November 27, 2012 – Scottsdale, AZ
 
·
29th Annual NASDAQ OMX Investor Program
 
December 4, 2012 London, UK
 
Members of Check Point's management team will present at these conferences and discuss the latest company strategies and initiatives. Check Point’s conference presentations are expected to be available via webcast on the company's web site. To view these presentations and access the most updated information please visit the company's web site at www.checkpoint.com/ir. The schedule is subject to change.
 
Conference Call and Webcast Information
Check Point will host a conference call with the investment community on October 17, 2012 at 8:30 AM ET/5:30 AM PT.  To listen to the live webcast, please visit the website at: www.checkpoint.com/ir. A replay of the conference call will be available through October 24, 2012 on the company's website or by telephone at +1.201.612.7415, replay ID number 401438.

About Check Point Software Technologies Ltd. 
Check Point Software Technologies Ltd. (www.checkpoint.com), the worldwide leader in securing the Internet, provides customers with 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 develop new innovations based on the Software Blade Architecture, providing customers with flexible and simple solutions that can be fully customized to meet the exact security needs of any organization. Check Point is the only vendor to go beyond technology and define security as a business process. Check Point 3D Security uniquely combines policy, people and enforcement for greater protection of information assets and helps organizations implement a blueprint for security that aligns with business needs. Customers include tens of thousands of organizations of all sizes, including all Fortune and Global 100 companies. Check Point's award-winning ZoneAlarm solutions protect millions of consumers from hackers, spyware and identity theft.  

©2012 Check Point Software Technologies Ltd. All rights reserved
 
       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  3
 
 

 
 
     
 
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, operating margin and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges, amortization of acquired intangible assets, gain on sale of marketable securities previously impaired or other than temporary impairment of marketable securities, net, and the related tax effects. 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 ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures in order to assist the investment community to see the Company “through the eyes of management,” and thereby enhance understanding of its operating performance. 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. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. 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.
 
       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  4
 
 

 
 
 
     
 
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF INCOME

 (In thousands, except per share amounts)

   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
   
(unaudited)
   
(unaudited)
   
(unaudited)
   
(unaudited)
 
Revenues:
 
 
   
 
             
   Products and licenses
  $ 121,036     $ 120,700     $ 354,373     $ 345,246  
   Software updates, maintenance and subscription
    211,320       187,610       619,748       544,982  
Total revenues
    332,356       308,310       974,121       890,228  
                                 
Operating expenses:
                               
   Cost of products and licenses
    20,606       18,760       60,881       55,395  
   Cost of software updates, maintenance and subscription
    17,380       16,066       50,164       45,986  
   Amortization of technology
    294       7,849       3,688       23,548  
Total cost of revenues
    38,280       42,675       114,733       124,929  
 
                               
   Research and development
    28,517       28,063       82,621       83,230  
   Selling and marketing
    64,501       62,091       189,415       185,385  
   General and administrative
    18,412       17,297       51,288       47,120  
Total operating expenses
    149,710       150,126       438,057       440,664  
                                 
Operating income
    182,646       158,184       536,064       449,564  
Financial income, net
    10,452       9,638       30,688       30,998  
Income before taxes on income
    193,098       167,822       566,752       480,562  
Taxes on income
    40,691       33,748       120,738       96,407  
Net income
  $ 152,407     $ 134,074     $ 446,014     $ 384,155  
                                 
Earnings per share (basic)
  $ 0.75     $ 0.65     $ 2.17     $ 1.85  
Number of shares used in computing earnings per share (basic)
      203,928         206,311       205,170         207,199  
Earnings per share (diluted)
  $ 0.73     $ 0.63     $ 2.12     $ 1.79  
Number of shares used in computing earnings per share (diluted)
     208,717         213,412         210,831         214,505  

       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  5

 
 

 
 
 
     
 
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION
 
(In thousands, except per share amounts)

   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
   
(unaudited)
   
(unaudited)
   
(unaudited)
   
(unaudited)
 
                         
GAAP operating income
  $ 182,646     $ 158,184     $ 536,064     $ 449,564  
Stock-based compensation (1)
    12,029       11,495       33,734       29,640  
Amortization of intangible assets (2)
    922       11,013       6,107       33,076  
Non-GAAP operating income
  $ 195,597     $ 180,692     $ 575,905     $ 512,280  
                                 
GAAP net income
  $ 152,407     $ 134,074     $ 446,014     $ 384,155  
Stock-based compensation (1)
    12,029       11,495       33,734       29,640  
Amortization of intangible assets (2)
    922       11,013       6,107       33,076  
Gain on sale of marketable securities previously impaired(3)
    -       -       -       (2,017 )
Taxes on the above items (4)
    (1,250 )     (3,689 )     (3,013 )     (9,378 )
Non-GAAP net income
  $ 164,108     $ 152,893     $ 482,842     $ 435,476  
                                 
GAAP Earnings per share (diluted)
  $ 0.73     $ 0.63     $ 2.12     $ 1.79  
Stock-based compensation (1)
    0.06       0.05       0.16       0.14  
Amortization of intangible assets (2)
    0.01       0.05       0.03       0.15  
Gain on sale of marketable securities previously impaired(3)
    -       -       -       (0.01 )
Taxes on the above items (4)
    (0.01 )     (0.01 )     (0.02 )     (0.04 )
Non-GAAP Earnings per share (diluted)
  $ 0.79     $ 0.72     $ 2.29     $ 2.03  
                                 
Number of shares used in computing Non-GAAP earnings per share (diluted)
    208,717       213,412       210,831       214,505  
                                 
(1) Stock-based compensation:
                               
   Cost of products and licenses
  $ 12     $ 11     $ 50     $ 41  
   Cost of software updates,  maintenance and subscription
    234       235       539       680  
   Research and development
    1,951       2,164       6,504       5,619  
   Selling and marketing
    2,445       2,328       7,272       5,909  
   General and administrative
    7,387       6,757       19,369       17,391  
    $ 12,029     $ 11,495     $ 33,734     $ 29,640  
                                 
(2) Amortization of intangible assets:
                               
   Amortization of technology-cost of revenues
    294       7,849        3,688       23,548  
   Selling and marketing
    628       3,164       2,419       9,528  
      922       11,013       6,107       33,076  
(3) Gain on Sale of marketable securities previously impaired
    -       -       -       (2,017 )
(4) Taxes on the above items
    (1,250 )     (3,689 )     (3,013 )     (9,378 )
Total, net
  $ 11,701     $ 18,819     $ 36,828     $ 51,321  
 
       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  6
 
 

 
 
     
 
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)
 
ASSETS
 
   
September 30,
   
December 31,
 
   
2012
   
2011
 
   
(unaudited)
   
(audited)
 
Current assets:
           
Cash and cash equivalents
  $ 330,391     $ 493,546  
Marketable securities and short-term deposits
    1,119,878       865,994  
Trade receivables, net
    240,911       357,418  
Prepaid expenses and other current assets
    50,266       53,045  
Total current assets
    1,741,446       1,770,003  
                 
Long-term assets:
               
Marketable securities
    1,796,515       1,519,865  
Property and equipment, net
    35,505       36,639  
Severance pay fund
    5,818       6,052  
Deferred tax asset, net
    22,146       25,296  
Other intangible assets, net
    20,132       26,239  
Goodwill
    727,875       727,875  
Other assets
    18,428       16,094  
Total long-term assets
    2,626,419       2,358,060  
                 
Total assets
  $ 4,367,865     $ 4,128,063  

LIABILITIES AND
SHAREHOLDERS’ EQUITY
 
Current liabilities:
           
Deferred revenues
  $ 449,614     $ 490,655  
Trade payables and other accrued liabilities
    301,300       271,815  
Total current liabilities
    750,914       762,470  
                 
Long-term deferred revenues
    56,330       61,523  
Income tax accrual
    241,050       219,469  
Deferred tax liability, net
    -       1,274  
Accrued severance pay
    9,987       10,236  
      307,367       292,502  
Total liabilities
    1,058,281       1,054,972  
                 
Shareholders’ equity:
               
Share capital
    774       774  
Additional paid-in capital
    674,195       630,508  
Treasury shares at cost
    (1,802,819 )     (1,543,886 )
Accumulated other comprehensive income
    18,375       12,650  
Retained earnings
    4,419,059       3,973,045  
Total shareholders’ equity
    3,309,584       3,073,091  
Total liabilities and shareholders’ equity
    4,367,865     $ 4,128,063  
Total cash and cash equivalents, marketable securities and short-term deposits
  $ 3,246,784     $ 2,879,405  
 
       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  7
 
 

 
 
     
 
CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW DATA
 
(In thousands)
 
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
   
(unaudited)
   
(unaudited)
   
(unaudited)
   
(unaudited)
 
Cash flow from operating activities:
                       
Net income
  $ 152,407     $ 134,074     $ 446,014     $ 384,155  
Adjustments to reconcile net income to net cash provided by operating activities:
                               
Depreciation of property and equipment
    2,228       1,808        6,010       5,360  
Amortization of intangible assets
    922       11,013       6,107       33,076  
Stock-based compensation
    12,029       11,495       33,734       29,640  
Realized gain on marketable securities
    (396 )     -       (493 )     (2,481 )
Decrease (increase) in trade and other receivables, net
    9,359       (1,971 )     115,219       77,936  
Increase in deferred revenues, trade payables and other accrued liabilities
    6,200       5,323       3,961       27,087  
Excess tax benefit from stock-based compensation
    (1,854 )     (2,660 )     (1,619 )     (4,748 )
Deferred income taxes, net
    (448 )     (4,549 )     4,374       (8,378 )
Net cash provided by operating activities
    180,447       154,533       613,307       541,647  
                                 
Cash flow from investing activities:
                               
Cash paid in conjunction with acquisitions, net of acquired cash
    -       (55 )     -       (6,556 )
Investment in property and equipment
    (1,175 )     (1,989 )     (4,876 )     (5,473 )
Net cash used in investing activities
    (1,175 )     (2,044 )     (4,876 )     (12,029 )
                                 
Cash flow from financing activities:
                               
Proceeds from issuance of shares upon exercise of options
    13,837       11,827       55,461       51,378  
Purchase of treasury shares
    (156,059 )     (75,000 )     (306,058 )     (225,000 )
Excess tax benefit from stock-based compensation
    1,854       2,660       1,619       4,748  
Net cash used in financing activities
    (140,368 )     (60,513 )     (248,978 )     (168,874 )
                                 
Unrealized gain (loss) on marketable securities, net
    6,068       (5,314 )     7,926       780  
                                 
Increase in cash and cash equivalents, marketable securities and
short term deposits
    44,972       86,662       367,379       361,524  
                                 
Cash and cash equivalents, marketable securities and
short term deposits at the beginning of the period
    3,201,812       2,689,808       2,879,405       2,414,946  
                                 
Cash and cash equivalents, marketable securities and
short term deposits at the end of the period
  $ 3,246,784     $ 2,776,470     $ 3,246,784     $ 2,776,470  

       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  8
 
 

 
 
     
 
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.
 
       
October 17, 2012
By:
/s/ Tal Payne  
    Tal Payne  
   
Chief Financial Officer
 
 
       
  softwarebladesTM
©2012 Check Point Software Technologies Ltd. All rights reserved.
Classification: [Unrestricted] For Everyone|     P.  9