Network security technology company Check Point Software Technologies Ltd. saw revenue grow in the first quarter of 2004, even as its net income dropped because of charges resulting from the recent acquisition of Zone Labs Inc.
Check Point reported revenue of US$116 million in the quarter ending March 31, compared with revenue of US$104 million in the same quarter last year, an increase of 11 percent. However, charges related to the purchase of Zone Labs drove net income down more than 30 percent, to almost US$41 million, or US$0.16 per share, compared to US$60 million, or US$0.24 per share, in the same quarter last year, the company said Tuesday.
Check Point, of Redwood City, California, completed its acquisition of Zone Labs for US$205 million in cash and stock on March 26. Consequently, Zone Labs' operating results were not included in Check Point's first quarter. However, Check Point did record a one time charge of US$23.1 million to acquire the company, which makes Internet firewall products that are popular among consumers and VPN (virtual private network) software users.
That charge aside, Check Point said its net income rose 8 percent for the quarter to US$65 million, or US$0.25 per share, compared with US$60 million, or US$0.24 per share, in the first quarter of last year.
Check Point credited the success of new products, including VPN-1 Edge and Check Point Express, for the growth. The company plans to use the technology acquired with Zone Labs to develop a comprehensive security portfolio that stretches from large enterprises to consumers, Check Point said.
The company also said that it plans to introduce a new line of products that will address Web access and Web security issues.