-- PillCam SB 2-EX A small bowel capsule which extends capsule operating time to a minimum of 12 hours for patients who are confirmed or believed to have slow motility -- PillCam Express A video capsule delivery device for patients who are unable to ingest the capsule or who have slow gastric emptying timesConference Call / Webcast Information U.S. Call / Webcast The company will host a conference call in English at 9:00 am ET on Thursday, November 4, 2010. To participate in this teleconference, please dial 888-264-8893 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-1482. The call will also be webcast live at www.givenimaging.com. A replay of the call will be available for two weeks on the company's website, or until November 18 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 2594018. Hebrew Call A separate conference call in Hebrew will take place on November 4, 2010 at 1:00 pm Israel time, 7:00 am ET. To access this call, please dial +972 3 918 0610 ten minutes before the conference is scheduled to begin. A replay of the call will be available from November 7 until November 9 by dialing +972 3 925 5921. About Given Imaging Ltd. Since 2001, Given Imaging has advanced gastrointestinal visualization by developing innovative, patient-friendly tools based on its PillCam® Platform. PillCam® capsule endoscopy uses cutting-edge, wireless technology and advanced software to provide physicians with natural images of the small intestine via PillCam® SB, the esophagus through PillCam® ESO and the colon with PillCam® COLON [PillCam® COLON is not cleared for use in the USA]. The PillCam® capsules are miniature video cameras that patients ingest. Given Imaging's other capsule products include Agile™ patency capsule, to verify intestinal patency, and Bravo®, the only wireless, catheter-free, 48-hour pH test commercially available for pH testing to assess gastroesophageal reflux disease (GERD). In April, 2010, Given Imaging acquired Sierra Scientific Instruments, the leading provider of specialty GI diagnostic solutions and pioneer of high-resolution manometry for assessing gastrointestinal motility. Sierra Scientific is now a wholly-owned subsidiary of Given Imaging. Given Imaging's headquarters, manufacturing and R&D facilities are located in Yoqneam, Israel, with operating subsidiaries in the United States, Germany, France, Japan, Australia and Hong Kong. For more information, please visit www.givenimaging.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, projections about our business and our future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual events, results, performance, circumstances or achievements of the Company to be materially different from any future events, results, performance, circumstances or achievements expressed or implied by such forward-looking statements. Factors that could cause actual events, results, performance, circumstances or achievements to differ from such forward-looking statements include, but are not limited to, the following: (1) our ability to develop and bring to market new products, (2) our ability to successfully complete any necessary or required clinical studies with our products, (3) our ability to receive regulatory clearance or approval to market our products or changes in regulatory environment, (4) our success in implementing our sales, marketing and manufacturing plans, (5) the level of adoption of our products by medical practitioners, (6) the emergence of other products that may make our products obsolete, (7) lack of an appropriate bowel preparation materials to be used with our PillCam COLON capsule, (8) protection and validity of patents and other intellectual property rights, (9) the impact of currency exchange rates, (10) the effect of competition by other companies, (11) the outcome of significant litigation, (12) our ability to obtain reimbursement for our product from government and commercial payors, (13) quarterly variations in operating results, (14) the possibility of armed conflict or civil or military unrest in Israel, (15) the impact of global economic conditions, (16) our ability to successfully integrate acquired businesses, (17) changes and reforms in applicable healthcare laws and regulations and (18) other risks and factors disclosed in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, risks and factors identified under such headings as "Risk Factors," "Cautionary Language Regarding Forward-Looking Statements" and "Operating Results and Financial Review and Prospects" in the Company's Annual Report on Form 20-F for the year ended December 31, 2009. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except for the Company's ongoing obligations to disclose material information under the applicable securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
Given Imaging Ltd. and its Consolidated Subsidiaries
Excluded Items
For the Three Months Ended September 30, 2009 and 2010
(Unaudited, dollars in thousands)
Research Selling General Tax
Gross And And And Expense
Profit Development Marketing Admin (Benefit) Total
--------- --------- --------- --------- -------- --------
Three month
period ended
September 30,
2010
Compensation
expenses $ - $ 148 $ 367 $ 1,550 $ - $ 2,065
Sierra PPA 236 (111) 82 - (82) 125
--------- --------- --------- --------- -------- --------
Total $ 236 $ 37 $ 449 $ 1,550 ($ 82) $ 2,190
========= ========= ========= ========= ======== ========
Three month
period ended
September 30,
2009
Compensation
expenses $ - $ 93 $ 511 $ 1,586 $ - $ 2,190
--------- --------- --------- --------- -------- --------
Total $ - $ 93 $ 511 $ 1,586 $ 0 $ 2,190
========= ========= ========= ========= ======== ========
Given Imaging Ltd. and its Consolidated Subsidiaries
Excluded Items
For the Nine Months Ended September 30, 2009 and 2010
(Unaudited, dollars in thousands)
Research Selling General Tax
Gross And And And Expense
Profit Development Marketing Admin (Benefit) Total
--------- --------- --------- --------- -------- --------
Nine month
period ended
September 30,
2010
Compensation
expenses $ - $ 304 $ 993 $ 5,173 $ - $ 6,470
Sierra
acquisition
expenses - - - 686 - 686
Sierra PPA 1,745 - 164 250 (761) 1,398
--------- --------- --------- --------- -------- --------
Total $ 1,745 $ 304 $ 1,157 $ 6,109 ($ 761) $ 8,554
========= ========= ========= ========= ======== ========
Nine month
period ended
September 30,
2009
Compensation
expenses $ - $ 286 $ 1,509 $ 4,083 $ - $ 5,878
Tax (benefit) - - - - (1,390) (1,390)
--------- --------- --------- --------- -------- --------
Total $ 0 $ 286 $ 1,509 $ 4,083 ($ 1,390) $ 4,488
========= ========= ========= ========= ======== ========
Given Imaging Ltd. and its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the Three months ended September 30, 2010 and 2009
Condensed, in thousands except share and per share data
Q3 2010 Q3 2009
Specified Specified
Items Non Items Non
GAAP (*) GAAP GAAP (*) GAAP
-------- -------- -------- -------- --------- --------
Revenues $ 38,658 - $ 38,658 $ 35,220 - $ 35,220
Cost of
revenues (8,999) 236 (8,763) (7,827) - (7,827)
Gross profit 29,659 236 29,895 27,393 27,393
Gross profit
as a % of
revenues 76.7% - 77.3% 77.8% 77.8%
Operating
expenses
Research and
development,
net (5,635) 37 (5,598) (4,632) 93 (4,539)
Sales and
marketing (17,408) 449 (16,959) (14,758) 511 (14,247)
General and
administrative (6,046) 1,550 (4,496) (5,042) 1,586 (3,456)
Other, net (142) - (142) (316) - (316)
Total operating
expenses (29,231) 2,036 (27,195) (24,748) 2,190 (22,558)
Operating
profit 428 2,272 2,700 2,645 2,190 4,835
Operating
profit as a %
of revenues 1.1% 7.0% 7.5% 13.7%
Financing
income, net 887 - 887 1,086 - 1,086
Profit before
taxes on income 1,315 2,272 3,587 3,731 2,190 5,921
Income tax
benefit
(expense) (334) (82) (416) -6 0 (6)
Net Profit 981 2,190 3,171 3,725 2,190 5,915
Net loss
attributable to
non-controlling
interest 30 - 30 114 - 114
Net profit
attributable to
shareholders $ 1,011 $ 2,190 $ 3,201 $ 3,839 $ 2,190 $ 6,029
2.6% 8.3% 10.9% 17.1%
Earnings per
share
Basic Earnings
attributable to
shareholders
per Ordinary
Share $ 0.03 $ 0.08 $ 0.108 $ 0.13 $ 0.07 $ 0.20
Diluted Earnings
attributable to
shareholders
per Ordinary
Share $ 0.03 $ 0.08 $ 0.11 $ 0.13 $ 0.07 $ 0.20
Given Imaging Ltd. and its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the nine months ended September 30, 2010 and 2009
Condensed, in thousands except share and per share data
YTD 2010 YTD 2009
Specified Specified
Items Non Items Non
GAAP (*) GAAP GAAP (*) GAAP
-------- -------- -------- -------- -------- --------
Revenues $112,889 - $112,889 $101,723 - $101,723
Cost of
revenues (27,397) 1,745 (25,652) (23,766) - (23,766)
Gross profit 85,492 1,745 $ 87,237 77,957 - 77,957
Gross profit
as a % of
revenues 75.7% 77.3% 76.6% 76.6%
Operating
expenses
Research and
development,
net (14,575) 304 (14,271) (12,522) 286 (12,236)
Sales and
marketing (48,502) 1,157 (47,345) (45,257) 1,509 (43,748)
General and
administrative (18,136) 6,109 (12,027) (14,021) 4,083 (9,938)
Other, net (376) - (376) (331) - (331)
Total operating
expenses (81,589) 7,570 (74,019) (72,131) 5,878 (66,253)
Operating
profit 3,903 9,315 13,218 5,826 5,878 11,704
Operating
profit as a %
of revenues 3.5% 11.7% 5.7% 11.5%
Financing
income, net 1,690 - 1,690 1,276 - 1,276
Profit before
taxes on
income 5,593 9,315 14,908 7,102 5,878 12,980
Income tax
benefit
(expense) (563) (761) (1,324) 1,160 (1,390) (230)
Net Profit 5,030 8,554 13,584 8,262 4,488 12,750
Net loss
attributable to
non-controlling
interest 245 - 245 704 - 704
Net profit
attributable to
shareholders $ 5,275 $ 8,554 $ 13,829 $ 8,966 $ 4,488 $ 13,454
Net profit
attributable to
shareholders
as a % of
revenues 4.7% 12.3% 8.8% 13.2%
Earnings per
share
Basic Earnings
attributable to
shareholders
per Ordinary
Share $ 0.18 $ 0.29 $ 0.48 $ 0.31 $ 0.15 $ 0.46
Diluted
Earnings
attributable to
shareholders
per Ordinary
Share $ 0.17 $ 0.28 $ 0.45 $ 0.30 $ 0.15 $ 0.45
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
September 30 December 31
------------- -------------
2010 2009
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 39,848 $ 46,458
Short-term investments 38,414 31,736
Accounts receivable:
Trade 25,113 24,742
Other 3,276 3,799
Inventories 18,921 17,302
Prepaid expenses 2,323 1,036
Deferred tax assets 1,558 2,207
Advances to suppliers 385 534
------------- -------------
Total current assets 129,838 127,814
------------- -------------
Deposits 1,223 1,062
Assets held for employee severance payments 5,895 4,968
Marketable securities 4,925 16,956
Non-current inventory 5,899 6,015
Fixed assets, at cost, less accumulated
depreciation 14,034 13,843
Deferred tax assets 192 192
Intangible assets, less accumulated
amortization 26,319 11,284
Goodwill 24,109 3,586
------------- -------------
Total Assets $ 212,434 $ 185,720
============= =============
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
September 30 December 31
------------ ------------
2010 2009
------------ ------------
Liabilities and equity
Current liabilities
Current installments of obligation under
capital lease $ 171 $ 145
Accounts payable:
Trade 8,704 6,789
Other 23,828 20,060
Deferred income 771 234
------------ ------------
Total current liabilities 33,474 27,228
------------ ------------
Long-term liabilities
Obligation under capital lease, net 285 356
Liability in respect of employees' severance
payments 6,617 5,530
------------ ------------
Deferred tax liabilities 4,486 -
------------ ------------
Total long-term liabilities 11,388 5,886
------------ ------------
Total liabilities 44,862 33,114
------------ ------------
Equity
Shareholders' equity
Ordinary Shares, NIS 0.05 par value each
(90,000,000 shares authorized; 29,784,327 and
29,370,972 shares issued and fully paid as
of September 30, 2010 and December 31, 2009,
respectively) 350 345
Additional paid-in capital 192,766 182,203
Capital reserve 2,051 2,166
Accumulated other comprehensive income 170 399
Accumulated deficit (27,910) (33,185)
------------ ------------
Shareholders' equity 167,427 151,928
------------ ------------
Non-controlling interest 145 678
------------ ------------
Total Equity 167,572 152,606
------------ ------------
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Statements of Operations
In thousands except share and per share data
(Unaudited)
Nine-month Three-month
period ended period ended
September 30 September 30 Year ended
---------------------- ---------------------- December 31
2010 2009 2010 2009 2009
---------- ---------- ---------- ---------- ----------
Revenues $ 112,889 $ 101,723 $ 38,658 $ 35,220 $ 141,763
Cost of
revenues (27,397) (23,766) (8,999) (7,827) (33,145)
---------- ---------- ---------- ---------- ----------
Gross profit 85,492 77,957 29,659 27,393 108,618
---------- ---------- ---------- ---------- ----------
Operating
expenses
Research and
development,
gross (15,643) (13,543) (6,196) (5,019) (17,842)
Government
grants 1,068 1,021 561 387 1,109
---------- ---------- ---------- ---------- ----------
Research and
development,
net (14,575) (12,522) (5,635) (4,632) (16,733)
Sales and
marketing (48,502) (45,257) (17,408) (14,758) (61,428)
General and
administrative (18,136) (14,021) (6,046) (5,042) (18,919)
Other, net (376) (331) (142) (316) (1,220)
---------- ---------- ---------- ---------- ----------
Total operating
expenses (81,589) (72,131) (29,231) (24,748) (98,300)
---------- ---------- ---------- ---------- ----------
Operating
income 3,903 5,826 428 2,645 10,318
Financing
income, net 1,690 1,276 887 1,086 1,584
---------- ---------- ---------- ---------- ----------
Income before
taxes
on income 5,593 7,102 1,315 3,731 11,902
Income tax
benefit
(expense) (563) 1,160 (334) (6) 1,542
---------- ---------- ---------- ---------- ----------
Net income 5,030 8,262 981 3,725 13,444
Net loss
attributable
to
non-controlling
interest 245 704 30 114 891
---------- ---------- ---------- ---------- ----------
Net income
attributable
to
shareholders $ 5,275 $ 8,966 $ 1,011 $ 3,839 $ 14,335
========== ========== ========== ========== ==========
Earnings per
share
Basic Earnings
attributable
to
shareholders
per Ordinary
Share $ 0.18 $ 0.31 $ 0.03 $ 0.13 $ 0.49
========== ========== ========== ========== ==========
Diluted
Earnings
attributable
to
shareholders
per Ordinary
Share $ 0.17 $ 0.30 $ 0.03 $ 0.13 $ 0.47
========== ========== ========== ========== ==========
Weighted
average number
of Ordinary
Shares used to
compute basic
Earnings
per Ordinary
Share 29,623,700 29,264,952 29,768,548 29,278,785 29,281,897
========== ========== ========== ========== ==========
Weighted
average number
of Ordinary
Shares used to
compute diluted
Earnings
per Ordinary
Share 30,566,498 30,108,597 30,346,875 30,648,420 30,423,162
========== ========== ========== ========== ==========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
(Unaudited)
Nine-month Three-month
period ended period ended
September 30 September 30 Year ended
------------------ ----------------- December 31
2010 2009 2010 2009 2009
-------- -------- -------- -------- --------
Cash flows from operating
activities:
Net income $ 5,030 $ 8,262 $ 981 $ 3,725 $ 13,444
Adjustments required to
reconcile net income
to net cash provided by
operating activities:
Depreciation and
amortization 5,823 4,513 1,767 1,531 6,096
Goodwill impairment - - 483
Deferred tax assets 649 (334) 276 (517) (1,221)
Deferred tax liabilities 4,486 - (82) - -
Stock based compensation 6,470 5,878 2,065 2,190 7,268
Loss from disposal of
fixed assets 468 331 176 316 714
Other 121 (231) 413 (80) (144)
Net change in trading
securities 108 (6,355) (215) (2,983) -
Decrease (increase) in
accounts receivable -
trade 3,309 426 1,256 1,134 (3,069)
Decrease (increase) in
accounts receivable -
other 527 1,569 1,511 (105) 863
Decrease (increase) in
prepaid expenses (761) (329) (764) (711) 595
Decrease in
advances to suppliers 149 2,963 348 262 3,006
Decrease (increase) in
inventories 2,213 (5,546) (428) (2,858) (4,386)
Increase (decrease) in
accounts payable (1,683) 1,251 3,992 1,760 1,819
Increase (decrease) in
deferred income 537 (1,304) (98) (386) (1,289)
-------- -------- -------- -------- --------
Net cash provided by
operating activities 22,960 11,094 11,198 3,278 24,179
-------- -------- -------- -------- --------
Cash flows from investing
activities:
Purchase of fixed assets
and intangible assets (3,777) (3,619) (1,227) (1,171) (4,794)
Deposits (41) 16 (14) 26 34
Acquisition of Sierra,
net of cash acquired (1) (34,709) - -
Proceeds from sales of
marketable securities and
short term investments 26,793 32,424 4,400 11,698 38,085
Investments in trading
and marketable securities (21,777) (13,218) (13,991) (1,010) (27,410)
-------- -------- -------- -------- --------
Net cash provided by
(used in)
investing activities (33,511) $ 15,603 (10,832) $ 9,543 5,915
-------- -------- -------- -------- --------
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
(Unaudited)
Nine-month Three-month
period ended period ended
September 30 September 30 Year ended
------------------ ----------------- December 31
2010 2009 2010 2009 2009
-------- -------- -------- -------- --------
Cash flows from financing
activities:
Principal payments on
capital lease obligation,
net $ (86) $ (97) $ (37) $ (32) $ (131)
Proceeds from the
issuance of Ordinary
Shares 4,098 50 307 50 954
Dividend distribution (15,799) - (15,799)
Purchase of shares from a
non-controlling
shareholder in a
subsidiary (403) (382) (403) - (382)
-------- -------- -------- -------- --------
Net cash (used in)
provided by financing
activities 3,609 (16,228) (133) 18 (15,358)
-------- -------- -------- -------- --------
Effect of exchange rate
changes on cash 332 33 559 122 25
-------- -------- -------- -------- --------
Increase (decrease) in
cash and cash
equivalents (6,610) 10,502 792 12,961 14,761
Cash and cash equivalents
at beginning of period 46,458 31,697 39,056 29,238 31,697
-------- -------- -------- -------- --------
Cash and cash equivalents
at end of period $ 39,848 $ 42,199 $ 39,848 $ 42,199 $ 46,458
======== ======== ======== ======== ========
Supplementary cash flow
information
Income taxes paid $ 184 $ 728 $ 90 $ 643 $ 877
======== ======== ======== ======== ========
Contact Information: For further information contact: Fern Lazar/David Carey Lazar Partners Ltd. 1-212-867-1768 /