The fourth quarter of 2001 showed an upward trend in the business environment, resulting in a sequential increase of revenues and net income. Net income was $77 million or $0.30 per share (diluted), an increase of 4% and 3% respectively over the third quarter 2001. Demand for Check Point products and services brought total revenues for the quarter to $123 million, a 4% increase over the third quarter.

Net income for the year was $322 million or $1.25 per share (diluted), compared to net income of $221 million or $0.84 per share (diluted) during fiscal year 2000, an increase of 46% and 49% respectively. Revenues for the fiscal year ended December 31, 2001 increased 24% to $528 million, compared to $425 million for fiscal year 2000.

During the fourth quarter, the company generated net cash flow of $84 million, bringing total net cash flow for the year to $372 million. Total cash and interest bearing investments at December 31, 2001 was $1.03 billion.

In 2001 we increased our earnings per share 49% and enhanced our technology and market leadership, in a year of unusual macro-economic challenges said Gil Shwed, chairman and chief executive officer of Check Point Software Technologies. This is a testament to the Check Point team and our focus on customers and innovation.

Highlights from 2001 include:

Check Point Next Generation – unveiled Check Point Next Generation (NG), using our next generation architecture for the VPN-1/FireWall-1 product suite. NG sets new standards for VPN and firewall manageability, reliability, scalability and performance and incorporates new One-Click technologies that greatly simplify VPN deployment and management.

New Levels of Performance and Price/Performance – introduced SecureXL performance architecture that leverages technology from Check Point and leading chip, appliance and computer system partners to enable the highest performance at a variety of price points. Currently-shipping products deliver speeds in excess of 3 Gbps. Also set new levels of VPN and firewall price/performance with Check Point NG. Benchmarks delivered over 1.7 Gbps throughput on $4,000 open midrange PC and Secured by Check Point appliances and over 200 Mbps on $400 PC.

Expanded Nokia Alliance – deepened longstanding partnership with Nokia by tightly aligning development strategies to jointly deliver the industry’s most advanced security solutions for wired and wireless environments.

Extended Breadth of Secured by Check Point Appliance Offerings – increased number of partners to over 15 and delivered new Secured by Check Point appliances. Introduced the jointly-developed Compaq, Celestix (sub-$1000) and Intrusion.com appliances. Partnered with Nortel Networks, CoSine Communications, Crossbeam Systems and Cubix Corporation for data center and subscriber management high-end platforms.

Revolutionized Security for the Broadband SOHO market – a sub $300 security device – SofaWare Technologies, a Check Point company, announced the S-box Safe@Home software and security appliance. S-box revolutionizes home office and general home computer Internet security with extreme ease-of-use, the highest levels of security, and management capabilities for ISP, enterprise and self-managed environments.

Mr. Shwed continued: I am proud of the accomplishments we achieved this year and look forward to the challenges of 2002. We will continue to focus on our customer needs and introduce new technologies and innovative products. These solutions will drive our vision of making internet communication available and secure everywhere.