Check Point Software Technologies Inc (CHKP)

[midastouch017]

Check Point Software Reports 2005 Fourth Quarter and Annual Financial Results

Monday January 30, 4:00 am ET
Fourth Quarter EPS Increased 21% Year Over Year
Strong Growth in Deferred Revenues

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Jan. 30, 2006--Check Point® Software Technologies Ltd. (NASDAQ:CHKP - News), the worldwide leader in securing the Internet, today announced its financial results for the fourth quarter and year ended December 31, 2005.
"Check Point's fourth quarter business provided a strong finish to the year 2005," said Gil Shwed, chairman and chief executive officer of Check Point Software. "Our fourth quarter and annual 2005 financial results reached record levels across earnings per share, revenues, deferred revenues, and cash balances."

Financial Highlights for the Fourth Quarter of 2005:

Revenues: $156.1 million, an increase of 9% compared to $143.0 million in the fourth quarter of 2004.
Net Income: $89.2 million, an increase of 17% compared to $76.4 million in the fourth quarter of 2004. Net income excluding acquisition related charges(1) was $90.9 million, an increase of 15% compared to $78.7 million in the fourth quarter of 2004.
Earnings per Diluted Share: $0.36, an increase of 21% compared to $0.30 in the fourth quarter of 2004. EPS excluding net acquisition related charges was $0.37, an increase of 20% compared to $0.31 in the fourth quarter of 2004.
Deferred Revenues: $169.0 million, an increase of $24.7 million or 17% over deferred revenues as of September 30, 2005.
Share Repurchase Program: During the fourth quarter of 2005, Check Point purchased 1.25 million shares at a total cost of approximately $27.5 million. In 2005, the company purchased a total of 10.6 million shares for a total cost of $237 million.
Financial Highlights for the Year Ended December 31, 2005:

Revenues: $579.4 million, an increase of 12% compared to $515.4 million for the year ended December 31, 2004.
Net Income: $319.7 million, an increase of 29% compared to $248.4 million for the year ended December 31, 2004. Net income excluding acquisition related charges was $326.9 million, an increase of 17% compared to $278.7 million for the year ended December 31, 2004.
Earnings per Diluted Share: $1.27, an increase of 33% compared to $0.95 for the year ended December 31, 2004. EPS excluding net acquisition related charges was $1.30, an increase of 21% compared to $1.07 for the year ended December 31, 2004.
Cash and Investments Balance: $1.74 billion as of December 31, 2005.
During the year, Check Point introduced many products and technologies, as well as continued to expand and unify the portfolio of security solutions. The company also garnered many awards. Key business highlights, product introductions and accolades include the following:

Business Highlights and Introductions during 2005

Expanded Industry's only Unified Security Architecture -- In 2005, Check Point launched the NGX(TM) platform, a major upgrade to Check Point's core technology. It is the unified security platform for perimeter, internal and Web security solutions enabling enterprises of all sizes to reduce the cost and complexity of security and ensure that their security systems can be easily extended to adapt to new and evolving threats.
Internal Security, Intrusion Prevention & Web Security -- During the year we have seen strong growth in our Web-security and SSL VPN product family, Connectra(TM), with revenue growth of over 250% for the year. We have also expanded our internal security family, InterSpect(TM), that combines active intrusion prevention, network zone segmentation and quarantine capabilities. We look forward to enhancing our technology with the pending acquisition of Sourcefire, Inc. A definitive agreement was reached in October 2005. We have received US anti-trust approval and we are waiting for a determination on our pending application with the Committee on Foreign Investment in the U.S. (CFIUS).
New Product Family for Security Event Management, Eventia(TM) -- In early 2005, Check Point introduced the new Eventia(TM) family that allows IT professionals to collect, analyze, correlate and report on security events, and enables a higher level of intelligence and protection of the network security.
Introduced New Unified Threat Management (UTM) Solutions: Check Point Express CI(TM) and Safe@Office® 500 appliance series -- Check Point has entered the market for Unified Threat Management Solutions gateways that include in a single product integrated firewall, VPN, antivirus, intrusion prevention and many other security technologies. These two product families enable affordable security for small and medium businesses ranging from $400 to $15,000 per gateway.
Expanded Endpoint Security for Consumers and Enterprises -- ZoneAlarm® 6.0 provides new multi-layered security for consumers and debuted with a new OSFirewall(TM) and Anti-Spyware solution to prevent the most dangerous Internet threats including spyware, rootkits, viruses, and more from invading PCs. Integrity(TM) delivers the most complete endpoint security solution, including intrusion prevention, outbound threat protection, access policy enforcement, advanced server and policy automation, to proactively protect PCs and enterprise networks from the newest worms, viruses, spyware, and hacker attacks.
Partial List of Awards & Industry Recognitions in 2005:

Recognition by Industry Analyst Firms:

Tolly Group Tests Confirm Check Point Solution Completeness and Lowest TCO -- Tests by the Tolly Group confirmed that Check Point provides the broadest breadth of security coverage at the lowest Total Cost of Ownership (TCO) for today's complex security vulnerabilities in comparison to competing solutions from Cisco and Juniper.
Gartner Group Prestigious Magic Quadrant(TM) Report Leader -- Check Point positioned in the leader quadrant of Gartner's Magic Quadrant for Network Firewalls. This report evaluates both network and application firewall vendors on their ability to execute and completeness of vision.
META Group Industry Leader Position in METAspectrum(TM) Report -- Check Point was ranked as a market leader in META Group's METAspectrum report on Network Intrusion Control Systems. Of 12 vendors, Check Point ranked the highest for "performance" -- a category that measures the company's technology, services pricing and financial standing.
Frost & Sullivan Global Market Leadership for Endpoint Security Solutions -- Check Point, achieved prestigious recognition from Frost & Sullivan that bestowed Check Point Integrity(TM) endpoint security solution with their renowned Global Market Leadership Award for outstanding market share, revenue growth rate, profitability and market and technology innovation.
Awards and Recognition for Check Point's Partner Program:

CMP's VARBusiness Magazine:

Top Channel Executive: Kevin Maloney, Vice President, Worldwide Sales
Five-Star Rating: Check Point Valued Partner Program
2005 Annual Report Card: Check Point Achieves Exceptional Partner Satisfaction
Computer Reseller News (UK):

Security Vendor Partner of the Year
Awards for Products & Technology:

Check Point VPN-1® Pro: the industry's most proven and secure VPN

2005 Global Best Enterprise Security Solution and Best Firewall -- SC Magazine
Editor's Choice -- China Information World
Best Firewall/VPN -- Computerworld Hong Kong
Readers Choice, Best Firewall -- Computerworld Malaysia, Computerworld Singapore
Best Firewall -- Relatorio Bancario, Brazil
Readers' Choice, Best Server/Standalone Firewall -- Windows IT Pro
ZoneAlarm® Security Suite: complete internet protection for consumers

2005 Global and European Best SOHO Security Solution -- SC Magazine, SC Magazine (UK)
2005 Readers' Choice, Best Desktop Firewall -- Windows IT Pro
Editors' Choice, Desktop Security -- CNet
Editors' Choice, Best Security Suite -- PC Magazine
Editor's Choice, Best Security Suite -- LAPTOP Magazine
Check Point Integrity(TM): complete solution for securing internal-network endpoint PCs

2005 European Best Enterprise Security Solution -- SC Magazine
Endpoint Security Evaluation Winner -- Information Security Magazine
Unified Threat Management (UTM) Solutions for Small and Mid-Size Businesses

Midmarket Product of The Year, Check Point Express CI(TM) -- VARBusiness
Editor's Choice, Safe@Office -- InformationWeek
Excellent Security, Safe@Office -- ProtectStar, Germany
Mr. Shwed continued, "We've continued our expansion in 2005 by strengthening our Unified Security Architecture and delivering a unique set of integrated network security solutions for our customers. We believe that our innovative technology, breadth of solutions and customer acceptance will serve as the foundation for our future success."

Conference Call and Webcast Information

Check Point will host a conference call with the investment community on January 30, 2006 at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit Check Point's website at http://www.checkpoint.com/ir. A replay of the conference call will be available through February 13, 2006 at the Company's website http://www.checkpoint.com/ir or by telephone at [phone], pass code 6888307.

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