Check Point Software Technologies Ltd. (CHKPF) announced record financial results for the second quarter ended June 30, 1998. Net revenues for the quarter were $34.3 million, compared with $18 million for the same period in 1997, an increase of 90%. Net income for the quarter was $19.2 million, or $0.50 per share (diluted), compared with net income of $7.5 million or
$0.20 per share the same period in 1997, an increase of 158% in net income and 150% in net income per share.
Check Point also reported excellent results in the previous quarter, but the share was chopped following a rise of only 4% in quarterly sales. This time, sales rose 11% compared to the previous quarter, a most impressive figure that reflects swift growth. Check Point closed trading yesterday at $31.25 per share, but later demand boosted it to around $35.
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Reported financial results reflect the acquisition of MetaInfo, which was accounted for as a
pooling-of-interest, and all prior period amounts have been restated. Second quarter 1998 results included a capital gain of $2.6 million from the company's investment in AbirNet, which was acquired for cash and stock during the quarter. Excluding the effect of the gain, net income
for the quarter was $16.8 million or $0.44 (diluted).
``We are pleased with the company's results in the second quarter of 1998 and with the strong revenue growth, particularly from North America and Europe,'' said Gil Shwed, president and CEO of Check Point Software Technologies. ``This strength is evidence of our focused geographic and channel diversification, which has made Check Point what we believe is the strongest brand in security.
``In the second quarter, key revenue drivers for Check Point's business were enterprise security and virtual private networking, or VPNs,'' continued Shwed. "Our strategic focus on providing comprehensive enterprise solutions, including products and services that enable customers to secure their entire enterprise, is paying off.''
During the second quarter, the company's total installed base crossed the 51,000 mark, with more than 8,500 networks worldwide now using its award-winning VPN solution. Shipments of enterprise-level units with unlimited user functionality increased 12% in the second quarter. VPN functionality shipped with more than one-third of all licenses sold in the quarter, increasing 25% from the previous quarter.
Also announced during the quarter, Check Point expanded its two-year strategic partnership with Microsoft to provide unified policy-based management for global networks running Microsoft Windows NT. Check Point's U.S. channels experienced particularly strong growth in the second
quarter, with revenues increasing 28% over the first quarter.
OEM revenues, including revenues from Sun Microsystems, Inc., accounted for 16% of overall revenues in the second quarter, with Sun accounting for 11% of revenue. Check Point believes this decrease in revenues from Sun was due to the restructuring of Sun’s business in which the SunSoft, subsidiary was dissolved.
On April 21, 1998, the company completed its acquisition of MetaInfo., a Seattle, WA-based leader in IP address management software. MetaInfo launched its next-generation product, Meta IP 4.0, during the quarter.
"The integration of MetaInfo's products into our enterprise security and traffic management products is a key focus for the company in the next several months,'' said Deborah Triant, president and CEO of Check Point Software Technologies, Inc. ``With the addition of MetaInfo's IP management products, Check Point is the only company that can deliver the full range of solutions, including enterprise security, traffic management, and IP address management, to manage the active networks of the future."
Published by Israel's Business Arena July 16, 1998