zk1313741.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 2013
 
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- ________
 
       
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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 2013 THIRD QUARTER FINANCIAL RESULTS

SAN CARLOS, CA – October 21, 2013 — 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, 2013.
 
 
·
Total Revenue: $344.1 million, representing a 4 percent increase year over year
 
·
Non-GAAP Operating Income: $ 200.8 million, representing 58 percent of revenues
 
·
Non-GAAP EPS: $0.85, representing an 8 percent increase year over year
 
·
Deferred Revenues: $566.8 million, representing a 12 percent increase year over year
 
“We are very pleased with our healthy third quarter results.  Revenue and earnings per share for the quarter were toward the high-end of our projections, underscoring the strength of our business,” said Gil Shwed, founder, chairman, and chief executive officer of Check Point Software Technologies. “The recently launched data center and small appliance families were received enthusiastically by our customers and posted another quarter of high growth.”
 
Third Quarter 2013 Financial Highlights:
·
Total Revenue: $344.1 million, an increase of 4 percent, compared to $332.4 million in the third quarter of 2012.
·
GAAP Operating Income: $186.5 million, an increase of 2 percent, compared to $182.6 million in the third quarter of 2012. GAAP operating margin was 54 percent, compared to 55 percent in the third quarter of 2012.
·
Non-GAAP Operating Income: $200.8 million, an increase of 3 percent, compared to $195.6 million in the third quarter of 2012. Non-GAAP operating margin was 58 percent, compared to 59 percent in the third quarter of 2012.
·
GAAP Net Income and Earnings per Diluted Share: GAAP net income was $159.7 million, an increase of 5 percent, compared to $152.4 million in the third quarter of 2012. GAAP earnings per diluted share were $0.80, an increase of 10 percent, compared to $0.73 in the third quarter of 2012.
·
Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $168.9 million, an increase of 3 percent, compared to $164.1 million in the third quarter of 2012. Non-GAAP earnings per diluted share were $0.85, an increase of 8 percent, compared to $0.79, in the third quarter of 2012.
·
Deferred Revenues: As of September 30, 2013, we had deferred revenues of $566.8 million, an increase of 12 percent, compared to $505.9 million as of September 30, 2012.
·
Cash Flow: Cash flow from operations was $195.5 million, an increase of 8%, compared to $180.4 million in the third quarter of 2012.
·
Share Repurchase Program: During the third quarter of 2013, we repurchased 2.3 million shares at a total cost of $128.3 million.
·
Cash Balances, Marketable Securities and Short Term Deposits: $3,664.3 million as of September 30, 2013, an increase of $417.5 million, compared to $3,246.8 million as of September 30, 2012.

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.”
 
       
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Business Highlights

During the quarter we released the latest version of Check Point’s industry-leading Software Blades Architecture incorporating Threat Emulation to the platform.  In addition, we expanded the breadth of our data center family of appliances:

Check Point Security Gateway R77 Incorporates more than 50 product enhancements, including the new ThreatCloud Emulation Service, Check Point HyperSpect™ performance enhancing technology, and Check Point Compliance Software Blade.  R77 enables customers to take advantage of our comprehensive security platform to attain high levels of security with a lower total cost of ownership.

Check Point Threat Emulation – Check Point Threat Emulation prevents infections from undiscovered exploits, zero-day and targeted attacks. This innovative solution quickly inspects files and runs them in a virtual sandbox across multiple OS versions to discover malicious behavior and prevent discovered malware from entering the network.  Threat Emulation is available as a software blade or Private Cloud Emulation Appliance leveraging the ThreatCloud Emulation Service. 
 
13500 Data Center Appliance Launch The 13500 Appliance leverages Check Point HyperSpect™, which maximizes hardware utilization, and delivers 23.6 Gbps of real-life firewall throughput, 5.7 Gbps of real-life IPS throughput and 3,200 SecurityPower™ unit (SPU) rating.
 
Worldwide Industry Recognition:
 
Leader in Gartner’s Magic Quadrant for Unified Threat Management - Check Point is positioned as a Leader in Gartner’s Magic Quadrant for Unified Threat Management (UTM). The company has been in the Leaders quadrant for three consecutive years.

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 (MDP). The company has been in the Leaders quadrant for seven consecutive years.

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 Q2 2013, according to the IDC Worldwide Quarterly Security Appliance Tracker Q2 2013.

Shwed concluded, “The introduction of Threat Emulation in R77 empowers organizations of all sizes to protect their networks from malicious documents utilized by the most sophisticated APT attacks.  The leadership and innovation of our security solutions is recognized by the market research firms and embraced by our customers."

Fourth Quarter 2013 Investor Conference Participation Schedule:

·
Wells Fargo Securities Media & Technology Conference
 
November 12, 2013 – New York, NY
 
·
RBC Global Technology Conference
 
November 13, 2013 – New York, NY
 
·
UBS Global Technology Conference
 
November 20, 2013 – Sausalito, CA
 
·
Credit Suisse Annual Technology Conference
 
December 4, 2013 – Scottsdale, AZ
 
·
Raymond James Supply Chain Conference
 
December 9, 2013– New York, NY
 
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.
 
       
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Conference Call and Webcast Information
Check Point will host a conference call with the investment community on October 21, 2013 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 28, 2013 on the company's website or by telephone at +1.201.612.7415, replay ID number 422171.

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.  

©2013 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, 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.
 
       
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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,
 
   
2013
   
2012
   
2013
   
2012
 
   
(unaudited)
   
(unaudited)
   
(unaudited)
   
(unaudited)
 
Revenues:
 
 
   
 
             
   Products and licenses
  $ 121,081     $ 121,036     $ 348,373     $ 354,373  
   Software updates, maintenance and subscription
    223,046       211,320       658,656       619,748  
Total revenues
    344,127       332,356       1,007,029       974,121  
                                 
Operating expenses:
                               
   Cost of products and licenses
    21,727       20,606       61,492       60,881  
   Cost of software updates, maintenance and subscription
    18,342       17,380       54,395       50,164  
   Amortization of technology
    60       294       552       3,688  
Total cost of revenues
    40,129       38,280       116,439       114,733  
 
                               
   Research and development
    30,034       28,517       88,717       82,621  
   Selling and marketing
    68,783       64,501       201,093       189,415  
   General and administrative
    18,690       18,412       53,995       51,288  
Total operating expenses
    157,636       149,710       460,244       438,057  
                                 
Operating income
    186,491       182,646       546,785       536,064  
Financial income, net
    9,098       10,452       25,548       30,688  
Income before taxes on income
    195,589       193,098       572,333       566,752  
Taxes on income
    35,888       40,691       113,664       120,738  
Net income
  $ 159,701     $ 152,407     $ 458,669     $ 446,014  
                                 
Earnings per share (basic)
  $ 0.82     $ 0.75     $ 2.33     $ 2.17  
Number of shares used in computing earnings per share (basic)
    194,931         203,928       196,570       205,170  
                                 
Earnings per share (diluted)
  $ 0.80     $ 0.73     $ 2.29     $ 2.12  
Number of shares used in computing earnings per share (diluted)
    198,668        208,717       200,380         210,831  
 
       
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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,
 
   
2013
   
2012
   
2013
   
2012
 
   
(unaudited)
   
(unaudited)
   
(unaudited)
   
(unaudited)
 
                         
GAAP operating income
  $ 186,491     $ 182,646     $ 546,785     $ 536,064  
Stock-based compensation (1)
    13,642       12,029       38,564       33,734  
Amortization of intangible assets (2)
    662       922       2,410       6,107  
Non-GAAP operating income
  $ 200,795     $ 195,597     $ 587,759     $ 575,905  
                                 
GAAP net income
  $ 159,701     $ 152,407     $ 458,669     $ 446,014  
Stock-based compensation (1)
    13,642       12,029       38,564       33,734  
Amortization of intangible assets (2)
    662       922       2,410       6,107  
Taxes on the above items (3)
    (5,115 )     (1,250 )     (6,426 )     (3,013 )
Non-GAAP net income
  $ 168,890     $ 164,108     $ 493,217     $ 482,842  
                                 
GAAP Earnings per share (diluted)
  $ 0.80     $ 0.73     $ 2.29     $ 2.12  
Stock-based compensation (1)
    0.07       0.06       0.19       0.16  
Amortization of intangible assets (2)
    -       0.01       0.01       0.03  
Taxes on the above items (3)
    (0.02 )     (0.01 )     (0.03 )     (0.02 )
Non-GAAP Earnings per share (diluted)
  $ 0.85     $ 0.79     $ 2.46     $ 2.29  
                                 
Number of shares used in computing Non-GAAP earnings per share (diluted)
    198,668       208,717       200,380       210,831  
                                 
(1) Stock-based compensation:
                               
   Cost of products and licenses
  $ 19     $ 12     $ 60     $ 50  
   Cost of software updates,  maintenance and subscription
    266       234       714       539  
   Research and development
    2,108       1,951       6,897       6,504  
   Selling and marketing
    3,201       2,445       8,773       7,272  
   General and administrative
    8,048       7,387       22,120       19,369  
      13,642       12,029       38,564       33,734  
                                 
(2) Amortization of intangible assets:
                               
   Amortization of technology-cost of revenues
    60       294       552        3,688  
   Selling and marketing
    602       628       1,858       2,419  
      662       922       2,410       6,107  
(3) Taxes on the above items
    (5,115 )     (1,250 )     (6,426 )     (3,013 )
Total , net
  $ 9,189     $ 11,701     $ 34,548     $ 36,828  

 
       
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CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

ASSETS
   
September 30,
   
December 31,
 
   
2013
   
2012
 
   
(unaudited)
   
(audited)
 
Current assets:
           
Cash and cash equivalents
  $ 221,082     $ 574,802  
Marketable securities and short-term deposits
    1,039,364       928,535  
Trade receivables, net
    256,665       373,755  
Prepaid expenses and other current assets
    58,487       47,827  
Total current assets
    1,575,598       1,924,919  
                 
Long-term assets:
               
Marketable securities
    2,403,843       1,792,027  
Property and equipment, net
    38,056       36,973  
Severance pay fund
    6,193       6,038  
Deferred tax asset, net
    30,192       25,553  
Other intangible assets, net
    16,801       19,211  
Goodwill
    727,875       727,875  
Other assets
    19,620       19,797  
Total long-term assets
    3,242,580       2,627,474  
                 
Total assets
  $ 4,818,178     $ 4,552,393  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
           
Deferred revenues
  $ 498,588     $ 524,627  
Trade payables and other accrued liabilities
    442,887       346,568  
Total current liabilities
    941,475       871,195  
                 
Long-term deferred revenues
    68,166       65,063  
Income tax accrual
    303,558       259,547  
Deferred tax liability, net
    4,764       -  
Accrued severance pay
    10,712       10,279  
      387,200       334,889  
Total liabilities
    1,328,675       1,206,084  
                 
Shareholders’ equity:
               
Share capital
    774       774  
Additional paid-in capital
    737,876       693,212  
Treasury shares at cost
    (2,303,499 )     (1,955,328 )
Accumulated other comprehensive income
    2,636       14,606  
Retained earnings
    5,051,716       4,593,045  
Total shareholders’ equity
    3,489,503       3,346,309  
Total liabilities and shareholders’ equity
  $ 4,818,178     $ 4,552,393  
Total cash and cash equivalents, marketable securities and short-term deposits
  $ 3,664,289     $ 3,295,364  
 
       
  softwarebladesTM
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CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW DATA
 
(In thousands)
 
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2013
   
2012
   
2013
   
2012
 
   
(unaudited)
   
(unaudited)
   
(unaudited)
   
(unaudited)
 
Cash flow from operating activities:
                       
Net income
  $ 159,701     $ 152,407     $ 458,669     $ 446,014  
Adjustments to reconcile net income to net cash provided by operating activities:
                               
Depreciation of property and equipment
    2,205       2,228       6,302        6,010  
Amortization of intangible assets
    662       922       2,410       6,107  
Stock-based compensation
    13,642       12,029       38,564       33,734  
Realized gain on marketable securities
    (226 )     (396 )     (1,300 )     (493 )
Decrease in trade and other receivables, net
    7,595       9,359       112,846       115,219  
Increase in deferred revenues, trade payables and other accrued liabilities
    19,986       6,200       132,547       3,961  
Excess tax benefit from stock-based compensation
    (3,075 )     (1,854 )     (9,180 )     (1,619 )
Deferred income taxes, net
    (5,012 )     (448 )     (9,279 )     4,374  
Net cash provided by operating activities
    195,478       180,447       731,579       613,307  
                                 
Cash flow from investing activities:
                               
Investment in property and equipment
    (2,759 )     (1,175 )     (7,385 )     (4,876 )
Net cash used in investing activities
    (2,759 )     (1,175 )     (7,385 )     (4,876 )
                                 
Cash flow from financing activities:
                               
Proceeds from issuance of shares upon exercise of options
    18,030       13,837       51,460       55,461  
Purchase of treasury shares
    (128,276 )     (156,059 )     (402,710 )     (306,058 )
Excess tax benefit from stock-based compensation
    3,075       1,854       9,180       1,619  
Net cash used in financing activities
    (107,171 )     (140,368 )     (342,070 )     (248,978 )
                                 
Unrealized gain (loss) on marketable securities, net
    8,089       6,068       (13,199 )     7,926  
                                 
Increase in cash and cash equivalents, marketable securities and short term deposits
    93,637       44,972       368,925       367,379  
                                 
Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period
    3,570,652       3,201,812       3,295,364       2,879,405  
                                 
Cash and cash equivalents, marketable securities and short term deposits at the end of the period
  $ 3,664,289     $ 3,246,784     $ 3,664,289     $ 3,246,784  

       
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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  
       
October 21st, 2013.
 
       
  softwarebladesTM
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