Edgar Filing: CHECK POINT SOFTWARE TECHNOLOGIES LTD

zk1415278.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 July 2014

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	©2014 Check Point Software Technologies Ltd. All rights reserved.

INVESTOR CONTACT:	MEDIA CONTACT:
Kip E. Meintzer	James Rivas
Check Point Software Technologies	Check Point Software Technologies
+1.650.628.2040	+1.650.628.2215
ir@checkpoint.com	press@checkpoint.com

CHECK POINT SOFTWARE TECHNOLOGIES REPORTS 2014 SECOND QUARTER

FINANCIAL RESULTS

SAN CARLOS, CA – July 23, 2014 — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced its financial results for the second quarter ending June 30, 2014.

Total Revenue: $363 million, representing a 7 percent increase year over year

Non-GAAP Operating Income: $207 million, representing 57 percent of revenues

Non-GAAP EPS: $0.89, representing an 8 percent increase year over year

Deferred Revenues: $660 million, representing a 14 percent increase year over year

“We had a fantastic second quarter. Total revenues from products and software blades subscription delivered 10 percent growth, which was driven by strong demand across industries and business segments. We saw a nice up-tick in customer wins across the board with several very large customer contracts,” said Gil Shwed, founder, chairman, and chief executive officer of Check Point Software Technologies.

Financial Highlights for the Second Quarter of 2014:

·	Total Revenue: $363 million compared to $340 million in the second quarter of 2013.

·	GAAP Operating Income: $190 million compared to $183 million in the second quarter of 2013.

·	Non-GAAP Operating Income: $207 million compared to $198 million in the second quarter of 2013. Non-GAAP operating margin was 57 percent, compared to 58 percent in the second quarter of 2013.

·	GAAP Net Income and Earnings per Diluted Share: GAAP net income was $160 million compared to $151 million in the second quarter of 2013. GAAP earnings per diluted share were $0.83 compared to $0.76 in the second quarter of 2013.

·	Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $172 million compared to $165 million in the second quarter of 2013. Non-GAAP earnings per diluted share were $0.89 compared to $0.83 in the second quarter of 2013.

·	Deferred Revenues: As of June 30, 2014, deferred revenues were $660 million compared to $580 million as of June 30, 2013.

·	Cash Flow: Cash flow from operations was $168 million compared to $205 million in the second quarter of 2013.

·	Share Repurchase Program: During the second quarter of 2014, the company repurchased 3.0 million shares at a total cost of $194 million.

·	Cash Balances, Marketable Securities and Short Term Deposits: $3,643 million as of June 30, 2014, an increase of $72 million, compared to $3,571 million as of June 30, 2013.

For information regarding the Non-GAAP financial measures discussed in this release, as well as a reconciliation of such Non-GAAP financial measures to the most directly comparable GAAP financial measures, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”


		softwarebladesTM	©2014 Check Point Software Technologies Ltd. All rights reserved.

Business Highlights

During the second quarter of 2014, Check Point launched new products and services, including:

41000 Security System – New datacenter and telco grade high performance system based on the multi-blade hardware architecture of the 61000. The 41000 has a smaller footprint, enabling more customers to deploy high performance scalable security. The 41000 delivers performance of up to 11,000 SecurityPower™ units (SPU), 40 Gbps of real-life firewall throughput, and 25 Gbps of real-life IPS throughput.

Smart-1 Appliance Family – Upgraded the entire line of the Smart-1 security management appliance family with five new appliances that deliver cyber security management for the era of big data. Smart-1 appliances enable organizations to consolidate security policy, log, and event management. The new Smart-1 Appliances allow for three times more effective storage capacity and report generation is greatly accelerated.

Next-Generation SmartEvent – Announced the availability of Next-Generation SmartEvent, a new and powerful event monitoring solution for real-time processing and storing of threat detection data. Next-Generation SmartEvent offers one single view for all security threats and network components, to more easily manage and analyze big data security, and to make faster and more informed security decisions.

ThreatCloud IntelliStore – The ThreatCloud IntelliStore provides a threat intelligence marketplace that enables organizations to select from a wide range of threat intelligence feeds relevant to them and simultaneously uses this intelligence to proactively stop threats at their Check Point Security Gateways.

Check Point 2014 Security Report – We published our annual industry security report which provides insight into the major security events that occurred in organizations across the world and offers recommendations on how to protect against them. The report is based on collaborative research from our Security Checkup assessments, Threat Emulation sensors, ThreatCloud™ and Endpoint Security reports, and includes in-depth analysis of 200,000+ hours of monitored network traffic from over 9,000 security gateways across 996 organizations of various industries worldwide. The report is available at http://www.checkpoint.com/securityreport.

Industry Accolades:

Leader in the Gartner Magic Quadrant for Enterprise Network Firewall - Check Point is positioned as a Leader in the Gartner Magic Quadrant for Enterprise Network Firewall. The company has been in the Leaders quadrant since 1999.

Top Position in Worldwide Combined Firewall and UTM Appliance Market - Check Point continued to be the number one vendor in worldwide combined Firewall and UTM appliance revenue for Q1 2014, according to the IDC Worldwide Quarterly Security Appliance Tracker Q1 2014.

“We’ve continued to innovate and expand our offerings this quarter with the introduction of our ThreatCloud IntelliStore, which provides customers access to the industry’s best cyber intelligence sources and translates it into real-time prevention. This is the latest layer in our Threat Prevention solution that includes our Intrusion Prevention (IPS), Network Anti-Virus, Web Security, Anti-bot and Threat Emulation,” concluded Shwed.

Third Quarter 2014 Investor Conference Participation Schedule:

·	Needham 2014 Software and Services Conference

August 5, 2014 – New York, NY

·	Pacific Crest 16th Annual Global Technology Leadership Forum

August 12, 2014 – Vail, CO

·	Citi 2014 Technology Conference

September 2, 2014 – New York, NY

·	Deutsche Bank 2014 dbAccess Technology Conference

September 9, 2014 – Las Vegas, NV


		softwarebladesTM	©2014 Check Point Software Technologies Ltd. All rights reserved.

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 July 23, 2014 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 August 1, 2014 on the company's website or by telephone at +1.201.612.7415, replay ID number 13586646.

About Check Point Software Technologies Ltd.

Check Point Software Technologies Ltd. (www.checkpoint.com), the worldwide leader in securing the Internet, is the only vendor to deliver Total Security for networks, data and endpoints, unified under a single management framework. Check Point 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 innovate with the development of the Software Blade Architecture™. The dynamic Software Blade Architecture delivers secure, flexible and simple solutions that can be fully customized to meet the exact security needs of any organization or environment. Check Point customers include tens of thousands of businesses and organizations of all sizes including all Fortune 100 companies. Check Point's award-winning ZoneAlarm solutions protect millions of consumers from hackers, spyware and identity theft.

Legal Notice 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. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, statements related to our expectations for software-defined protection, Next-Generation SmartEvent and our other new solutions, and our expectations regarding our collaboration with VMware to automate and simplify the provisioning and deployment of network security in private clouds. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; and general market, political, economic and business conditions. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 28, 2014. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law.

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 stock-based compensation charges, amortization of intangible assets and the related tax affects. 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	©2014 Check Point Software Technologies Ltd. All rights reserved.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per share amounts)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues:
Products and licenses	$	124,342	$	119,252	$	232,281	$	224,445
Software Blades subscriptions		63,743		52,350		125,500		101,504
Total revenues from products and software blades		188,085		171,602		357,781		325,949
Software updates and maintenance		174,513		168,570		347,023		336,953
Total revenues		362,598		340,172		704,804		662,902

Operating expenses:
Cost of products and licenses		22,353		20,916		42,413		39,765
Cost of software blades subscriptions		1,092		1,240		2,602		2,846
Total cost of products and software blades		23,445		22,156		45,015		42,611
Cost of Software updates and maintenance		17,506		16,959		34,754		33,207
Amortization of technology		60		198		120		492
Total cost of revenues		41,011		39,313		79,889		76,310

Research and development		33,451		29,369		66,417		58,683
Selling and marketing		79,821		70,481		148,435		132,310
General and administrative		18,394		17,719		35,644		35,305
Total operating expenses		172,677		156,882		330,385		302,608

Operating income		189,921		183,290		374,419		360,294
Financial income, net		7,298		7,608		14,447		16,450
Income before taxes on income		197,219		190,898		388,866		376,744
Taxes on income		37,563		39,890		76,125		77,776
Net income	$	159,656	$	151,008	$	312,741	$	298,968
Earnings per share (basic)	$	0.84	$	0.77	$	1.64	$	1.51
Number of shares used in computing earnings per share (basic)		189,933		196,387		190,972		197,418
Earnings per share (diluted)	$	0.83	$	0.76	$	1.61	$	1.49
Number of shares used in computing earnings per share (diluted)		193,380		199,946		194,566		201,265


		softwarebladesTM	©2014 Check Point Software Technologies Ltd. All rights reserved.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)

GAAP operating income	$	189,921		$	183,290		$	374,419		$	360,294
Stock-based compensation (1)		16,587			13,752			29,058			24,922
Amortization of intangible assets (2)		535			826			1,070			1,748
Non-GAAP operating income	$	207,043		$	197,868		$	404,547		$	386,964

GAAP net income	$	159,656		$	151,008		$	312,741		$	298,968
Stock-based compensation (1)		16,587			13,752			29,058			24,922
Amortization of intangible assets (2)		535			826			1,070			1,748
Taxes on the above items (3)		(4,679	)		(551	)		(6,868	)		(1,311	)
Non-GAAP net income	$	172,099		$	165,035		$	336,001		$	324,327

GAAP Earnings per share (diluted)	$	0.83		$	0.76		$	1.61		$	1.49
Stock-based compensation (1)		0.08			0.07			0.15			0.12
Amortization of intangible assets (2)		-			0.01			0.01			0.01
Taxes on the above items (3)		(0.02	)		(0.01	)		(0.04	)		(0.01	)
Non-GAAP Earnings per share (diluted)	$	0.89		$	0.83		$	1.73		$	1.61

Number of shares used in computing Non-GAAP earnings per share (diluted)		193,380			199,946			194,566			201,265

(1) Stock-based compensation:
Cost of products and licenses	$	22		$	23		$	38		$	41
Cost of software updates and maintenance		240			249			425			448
Research and development		2,661			2,802			4,754			4,789
Selling and marketing		3,874			3,312			6,202			5,572
General and administrative		9,790			7,366			17,639			14,072
	$	16,587		$	13,752		$	29,058		$	24,922

(2) Amortization of intangible assets:
Amortization of technology-cost of revenues		60			198			120			492
Selling and marketing		475			628			950			1,256
	$	535		$	826		$	1,070		$	1,748
(3) Taxes on the above items	$	(4,679	)	$	(551	)	$	(6,868	)	$	(1,311	)

Total , net	$	12,443		$	14,027		$	23,260		$	25,359


		softwarebladesTM	©2014 Check Point Software Technologies Ltd. All rights reserved.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

ASSETS

	June 30,		December 31,
	2014		2013
	(unaudited)		(audited)
Current assets:
Cash and cash equivalents	$	317,544	$	408,432
Marketable securities and short-term deposits		915,977		758,382
Trade receivables, net		245,432		379,648
Prepaid expenses and other current assets		59,907		53,856
Total current assets		1,538,860		1,600,318

Long-term assets:
Marketable securities		2,409,263		2,463,110
Property and equipment, net		38,083		37,991
Severance pay fund		6,479		6,488
Deferred tax asset, net		16,476		13,557
Other intangible assets, net		15,120		16,191
Goodwill		727,875		727,875
Other assets		19,865		20,907
Total long-term assets		3,233,161		3,286,119

Total assets		4,772,021	$	4,886,437

LIABILITIES AND

SHAREHOLDERS’ EQUITY

Current liabilities:
Deferred revenues	$	565,188		$	586,696
Trade payables and other accrued liabilities		251,228			396,102
Total current liabilities		816,416			982,798

Long-term liabilities:
Long-term deferred revenues		94,958			84,927
Income tax accrual		227,028			205,420
Deferred tax liability, net		636			308
Accrued severance pay		11,071			10,887
		333,693			301,542

Total liabilities		1,150,109			1,284,340

Shareholders’ equity:
Share capital		774			774
Additional paid-in capital		811,711			774,917
Treasury shares at cost		(2,757,415	)		(2,421,278	)
Accumulated other comprehensive income		8,256			1,839
Retained earnings		5,558,586			5,245,845
Total shareholders’ equity		3,621,912			3,602,097
Total liabilities and shareholders’ equity	$	4,772,021		$	4,886,437
Total cash and cash equivalents, marketable securities and short-term deposits	$	3,642,784		$	3,629,924


		softwarebladesTM	©2014 Check Point Software Technologies Ltd. All rights reserved.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

SELECTED CONSOLIDATED CASH FLOW DATA

(In thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Cash flow from operating activities:
Net income	$	159,656		$	151,008		$	312,741		$	298,968
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		2,248			2,081			4,439			4,097
Amortization of intangible assets		535			826			1,070			1,748
Stock-based compensation		16,587			13,752			29,058			24,922
Realized gain on marketable securities		(143	)		40			(154	)		(1,074	)
Decrease (increase) in trade and other receivables, net		(15,128	)		10,875			130,015			105,251
Increase (decrease) in deferred revenues, trade payables and other accrued liabilities		11,594			29,065			(129,500	)		112,561
Excess tax benefit from stock-based compensation		(2,674	)		(1,934	)		(1,952	)		(6,105	)
Deferred income taxes, net		(4,703	)		(1,054	)		(5,687	)		(4,267	)
Net cash provided by operating activities		167,972			204,659			340,030			536,101

Cash flow from investing activities:

Investment in property and equipment		(2,328	)		(2,044	)		(4,531	)		(4,626	)
Net cash used in investing activities		(2,328	)		(2,044	)		(4,531	)		(4,626	)

Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options		-			6,785			47,418			33,430
Purchase of treasury shares		(194,000	)		(142,797	)		(380,869	)		(274,434	)
Excess tax benefit from stock-based compensation		2,674			1,934			1,952			6,105
Net cash used in financing activities		(191,326	)		(134,078	)		(331,499	)		(234,899	)

Unrealized gain (loss) on marketable securities, net		6,272			(21,276	)		8,860			(21,288	)

Increase in cash and cash equivalents, marketable securities and short term deposits		(19,410	)		47,261			12,860			275,288

Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period		3,662,194			3,523,391			3,629,924			3,295,364

Cash and cash equivalents, marketable securities and short term deposits at the end of the period	$	3,642,784		$	3,570,652		$	3,642,784		$	3,570,652


		softwarebladesTM	©2014 Check Point Software Technologies Ltd. All rights reserved.

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/ Tal Payne
		Tal Payne
		Chief Financial Officer

July 23, 2014


		softwarebladesTM	©2014 Check Point Software Technologies Ltd. All rights reserved