Nine Nine
Third Qtr Months Third Qtr Months
2008 2008 2007 2007
--------- --------- ---------- ----------
Stock based compensation
expenses (FAS123R) 1.8 5.1 1.6 4.0
--------- --------- ---------- ----------
InScope gain - (5.4) - -
--------- --------- ---------- ----------
IP litigation expenses (0.2) 3.1 1.4 2.8
--------- --------- ---------- ----------
Settlement agreement with
Olympus Corporation - (2.3) - -
--------- --------- ---------- ----------
Loss from sale of securities (0.4) (0.4) - -
--------- --------- ---------- ----------
As of September 30, 2008 the Company had approximately $50 million in cash,
$35 million of US government marketable securities and approximately $23
million of corporate bonds, including AIG bonds valued at $4 million. In
marking these AIG bonds to market, the Company recorded a $1.1 million
temporary loss charged against Shareholders' Equity. The EPS guidelines
provided today exclude any potential impairment of the value of the AIG
bonds, or other corporate bonds, which may be required if instability in
the US financial markets continues. Also, during the quarter the Company
sold bonds of certain financial institutions, resulting in a loss of $0.4
million included in Finance Income, Net.
Recent Developments
New Product and Service Launches
Given Imaging recently launched new products and services developed to
facilitate physician use of PillCam Capsule Endoscopy. These include:
-- VueSpan Diagnostic Services: a service using an independent faculty of
gastroenterologists with recognized experience in capsule endoscopy to read
PillCam video capsule studies submitted for interpretation by other
gastroenterologists. VueSpan is currently offered in 14 states and is
expanding nationwide.
-- RAPID 5 Access: New software that allows a physician to read PillCam
videos anytime and anywhere with the most advanced software tools. RAPID 5
Access also enables network-based storage of PillCam studies and the import
and export of patient data to and from electronic medical record systems.
Conference Call / Webcast Information
U.S. Call / Webcast
The company will host a conference call in English on Wednesday, November
12 at 9:00am ET. To participate in this teleconference, please dial
800-926-7061 fifteen minutes before the conference is scheduled to begin.
Callers outside of the U.S. should dial 913-312-0379. 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 26,
2008 by dialing 888-203-1112. Callers outside of the U.S. should dial
719-457-0820. The replay participant code is 3443955.
Hebrew Call
The company will host a call in Hebrew on November 12 at 14:00 Israel time
(7:00am ET). To access this call, please dial +972-3-9180650 fifteen
minutes before the conference is scheduled to begin. A replay of the call
will be available November 12-14 by dialing +972-3-9255941.
About Given Imaging Ltd.
Given Imaging is redefining gastrointestinal diagnosis by developing,
producing and marketing innovative, patient-friendly products for detecting
gastrointestinal disorders. The company's technology platform is the
PillCam® Platform, featuring the PillCam video capsule, a disposable,
miniature video camera contained in a capsule, which is ingested by the
patient, a sensor array, data recorder and RAPID® software. Given Imaging
markets a number of available capsules: the second-generation PillCam SB 2
video capsule to visualize the entire small intestine which is currently
marketed in the United States and in more than 60 other countries; the
second-generation PillCam ESO 2 video capsule to visualize the esophagus;
the Agile™ patency capsule to determine the free passage of the PillCam
capsule in the GI tract and the PillCam COLON video capsule to visualize
the colon that has been cleared for marketing in the European Union.
PillCam COLON has received a CE Mark, but is not cleared for marketing or
available for commercial distribution in the USA. More than 820,000
patients worldwide have benefited from the PillCam capsule endoscopy
procedure. Given Imaging's headquarters, manufacturing and R&D facilities
are located in Yoqneam, Israel. It has operating subsidiary companies in
the United States, Germany, France, Japan, Australia and Singapore. Given
Imaging's largest shareholders include Elron Electronic Industries
(NASDAQ:ELRN) (TELAVIV:ELRN). For more information, visit
http://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 receive regulatory clearance or approval to market our
products or changes in regulatory environment, (3) our success in
implementing our sales, marketing and manufacturing plans, (4) protection
and validity of patents and other intellectual property rights, (5) the
impact of currency exchange rates, (6) the effect of competition by other
companies, (7) the outcome of significant litigation, (8) our ability to
obtain reimbursement for our product from government and commercial payors,
(9) quarterly variations in operating results, (10) the possibility of
armed conflict or civil or military unrest in Israel, and (11) 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, 2007. 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.
(Financial Tables Follow)
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
September December
30, 31,
2008 2007
----------- -----------
(Unaudited) (Audited)
----------- -----------
Assets
Current assets
Cash and cash equivalents $ 43,580 $ 37,103
Short-term investments 23,505 23,191
Accounts receivable:
Trade (Net of provisions for doubtful debts of
$279 and of $286 as of September 30, 2008 and
December 31, 2007, respectively) 19,020 23,315
Other 3,610 10,385
Inventories 19,756 15,960
Prepaid expenses 1,921 1,289
Deferred tax assets 1,066 1,350
Advances to suppliers 501 190
----------- -----------
Total current assets 112,959 112,783
----------- -----------
Deposits 1,110 892
Assets held for employee severance payments 4,198 3,007
Marketable Securities 41,363 41,629
Fixed assets, at cost, less accumulated
depreciation 15,585 15,422
Other assets, at cost, less accumulated
amortization 4,759 3,583
----------- -----------
Total assets $ 179,974 $ 177,316
=========== ==========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
September 30, December 31,
2008 2007
------------ ------------
(Unaudited) (Audited)
------------ ------------
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under
capital lease $ 125 $ 121
Accounts payable
Trade 8,610 7,275
Other 17,143 21,012
Deferred income 2,794 9,379
------------ ------------
Total current liabilities 28,672 37,787
------------ ------------
Long-term liabilities
Obligation under capital lease, net 466 448
Liability in respect of employees’ severance
payments 4,955 3,490
------------ ------------
Total long-term liabilities 5,421 3,938
------------ ------------
Total liabilities 34,093 41,725
------------ ------------
Minority interest 2,555 1,996
------------ ------------
Shareholders’ equity
Share capital:
Ordinary Shares, NIS 0.05 par value each
(90,000,000 shares authorized; 29,257,785
and 29,241,875 shares issued and fully paid
as of September 30, 2008 and
December 31, 2007, respectively) 343 343
Additional paid-in capital 172,191 166,813
Capital reserve 2,166 2,166
Accumulated other comprehensive loss (1,716) -
Accumulated deficit (29,658) (35,727)
------------ ------------
Total shareholders' equity 143,326 133,595
------------ ------------
Total liabilities and shareholders' equity $ 179,974 $ 177,316
============ ============
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Operations
In thousands except share and per share data
Nine month Three month
period ended period ended
September 30, September 30, Year ended
---------------------- ---------------------- December 31,
2008 2007 2008 2007 2007
---------- ---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
---------- ---------- ---------- ---------- ----------
Revenues $ 91,332 $ 78,572 $ 31,136 $ 27,676 $ 112,868
Cost of
revenues (23,736) (19,960) (7,793) (7,114) (29,721)
Early repayment
of royalty
bearing
government
grants - - - - (4,843)
---------- ---------- ---------- ---------- ----------
Gross profit 67,596 58,612 23,343 20,562 78,304
---------- ---------- ---------- ---------- ----------
Operating
expenses
Research and
development,
Gross (11,529) (9,093) (3,840) (3,105) (12,847)
Royalty and
non-royalty
bearing grants 1,090 1,673 300 980 1,242
---------- ---------- ---------- ---------- ----------
Research and
development,
net (10,439) (7,420) (3,540) (2,125) (11,605)
Sales and
marketing
expenses (46,569) (38,581) (14,647) (13,169) (55,446)
General and
administrative
expenses (14,449) (14,507) (4,276) (5,486) (20,981)
Termination of
marketing
agreement 5,443 - - - 22,860
Other - - - - (422)
---------- ---------- ---------- ---------- ----------
Total operating
expenses (66,014) (60,508) (22,463) (20,780) (65,594)
---------- ---------- ---------- ---------- ----------
Operating
profit (loss) 1,582 (1,896) 880 (218) 12,710
Financing
income, net 3,195 4,015 729 2,086 5,520
---------- ---------- ---------- ---------- ----------
Profit before
taxes on
income and
minority
share 4,777 2,119 1,609 1,868 18,230
Income tax
expense (233) (489) (107) (245) (4,548)
---------- ---------- ---------- ---------- ----------
Profit before
minority
Share 4,544 1,630 1,502 1,623 13,682
Minority share
in losses of
subsidiary 1,525 720 607 33 1,503
---------- ---------- ---------- ---------- ----------
Net profit $ 6,069 $ 2,350 2,109 $ 1,656 $ 15,185
========== ========== ========== ========== ==========
Earnings per
share
Basic Earnings
per Ordinary
Share $ 0.21 $ 0.08 $ 0.07 $ 0.06 $ 0.52
========== ========== ========== ========== ==========
Diluted
Earnings per
Ordinary Share $ 0.20 $ 0.08 $ 0.07 $ 0.05 $ 0.49
========== ========== ========== ========== ==========
Weighted
average number
of Ordinary
Shares used
to compute basic
Earnings per
Ordinary share 29,252,785 28,880,299 29,254,618 29,119,996 28,961,968
========== ========== ========== ========== ==========
Weighted
average number
of Ordinary
Shares used
to compute
diluted
Earnings
per Ordinary
share 30,791,425 30,911,256 30,601,355 31,239,196 31,030,458
========== ========== ========== ========== ==========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
Nine month period Three month period
ended ended
September 30, September 30, Year ended
---------------------- ---------------------- December 31,
2008 2007 2008 2007 2007
---------- ---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
---------- ---------- ---------- ---------- ----------
Cash flows from
operating
activities:
Net profit
(loss) $ 6,069 $ 2,350 $ 2,109 $ 1,656 $ 15,185
Adjustments
required to
reconcile net
loss to net
cash used in
operating
activities:
Minority share
in losses
of subsidiary (1,525) (720) (607) (33) (1,503)
Depreciation
and
amortization 3,839 3,532 1,298 1,252 4,771
Deferred tax
assets 284 (309) 109 134 24
Stock based
compensation 5,126 3,977 1,870 1,640 5,651
Excess tax
benefits
related to
stock based
compensation - - - - (693)
Other 197 18 188 129 380
Net decrease
(increase) in
trading
securities - 3,060 - (418) 5,092
Decrease
(increase) in
accounts
receivable -
trade 4,295 3 1,507 (1,343) (4,428)
Decrease
(increase) in
accounts
receivable -
other 6,775 (2,298) 2,192 (810) (8,922)
Decrease
(increase) in
prepaid
expenses (632) (922) (714) (541) 51
Increase in
advances
to suppliers (311) (175) (286) (42) (108)
Decrease
(Increase) in
inventories (3,796) (714) (1,179) (522) 2,208
Increase
(decrease) in
accounts
payable (2,792) 2,961 (1,007) 828 8,570
Increase
(decrease) in
deferred
income (6,585) (445) (72) 85 (14,903)
---------- ---------- ---------- ---------- ----------
Net cash
provided by
operating
activities 10,944 10,318 5,408 2,015 $ 11,375
---------- ---------- ---------- ---------- ----------
Cash flows from
investing
activities:
Excess of cash
investment
over
equity share
in subsidiary 965 - - - -
Purchase of
fixed assets
and
intangible
assets (5,166) (4,082) (1,569) (2,077) (5,772)
Deposits, net (247) (405) (3) (427) (355)
Proceeds from
sales of
marketable
securities 52,396 15,503 17,682 6,371 18,753
Proceeds from
sales of fixed
assets 30 - - - -
Purchase of
marketable
securities and
short term
investment (54,071) (27,789) (21,557) (992) (36,584)
---------- ---------- ---------- ---------- ----------
Net cash (used
in) provided
by investing
activities (6,093) (16,773) (5,447) 2,875 $ (23,958)
---------- ---------- ---------- ---------- ----------
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands except share and per share data
Nine month Three month
period ended period ended
September 30, September 30, Year ended
---------------------- ---------------------- December 31,
2008 2007 2008 2007 2007
---------- ---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
---------- ---------- ---------- ---------- ----------
Cash flows from
financing
activities:
Principal
payments on
capital
lease
obligation (91) (10) (6) (4) $ (37)
Proceeds from
issuance of
ordinary shares 252 3,928 56 1,036 4,280
Issuance of
shares to a
minority
shareholder in
a consolidated
company 1,207 - - - -
Excess tax
benefits
related to
stock based
compensation - - - - 693
---------- ---------- ---------- ---------- ----------
Net cash
provided by
financing
activities 1,368 3,918 50 1,032 $ 4,936
---------- ---------- ---------- ---------- ----------
Effect of
exchange rate
changes
on cash 258 121 (15) 138 240
---------- ---------- ---------- ---------- ----------
Increase
(decrease) in
cash and cash
equivalents 6,477 (2,416) (4) 6,060 (7,407)
Cash and cash
equivalents
at beginning of
period 37,103 44,510 43,584 36,034 44,510
---------- ---------- ---------- ---------- ----------
Cash and cash
equivalents at
end of period $ 43,580 $ 42,094 $ 43,580 $ 42,094 $ 37,103
========== ========== ========== ========== ==========
Supplementary
cash flow
Information
Income taxes
paid $ 194 $ 283 $ 72 $ 130 $ 1,098
========== ========== ========== ========== ==========
Assets acquired
under capital
lease $ 109 - - - $ 569
========== ========== ========== ========== ==========
Contact Information: For further information contact: Fern Lazar/David Carey Lazar Partners Ltd. 1-212-867-1768 /