YOQNEAM, ISRAEL -- (Marketwire) -- 08/06/08 -- Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the second quarter ended June 30, 2008.
Worldwide revenues increased by 19% to $33.1 million in the second quarter of 2008, from $27.8 million in the second quarter of 2007. Revenues increased 22% compared to the first quarter of 2008. Gross margin in the second quarter of 2008 was 75.5%, which was the same as the second quarter of 2007. Gross margin in the first quarter of 2008 was 71.1%.
On a GAAP basis, net income increased to $2.9 million or $0.09 per share on a fully diluted basis in the second quarter of 2008, compared to net income of $623,000, or $0.02 per share on a fully diluted basis in the second quarter of 2007. A table detailing certain items affecting net income in the second quarter and first half of 2007 and 2008 is available below.
For the second quarter of 2008, net cash used in operating activities totaled $1.4 million. Cash and cash equivalents, short-term investments and marketable securities at June 30, 2008 totaled $107.3 million.
"We are very pleased with our robust second quarter financial results," said Homi Shamir, president and CEO of Given Imaging. "Expanding market penetration and stronger global demand for PillCam SB in our three operating regions helped increase sales by 19%. We are especially pleased to be back on track with revenue growth in the Americas region which increased 25% on a sequential basis while PillCam reorders increased 28% sequentially in the region. In the first six months of 2008 total revenues grew 18.3% over the same period last year, which positions us to meet our 2008 revenue guidance. Looking ahead, we are confident in our ability to expand the global market for PillCam SB, as well as to develop the market for our other next generation PillCam products."
Second Quarter 2008 Revenue Analysis
Sales in the Americas region were $19.7 million, up 7% from the $18.4 million in the same period in 2007. EMEA sales increased 20.3% to $8.3 million compared to $6.9 million in the same period in 2007, while APAC sales doubled to $5.0 million from $2.5 million in the same period in 2007.
Worldwide PillCam SB sales were 53,500 in the second quarter of 2008, an increase of 10.3% compared to the same period last year. PillCam SB sales in the Americas increased 8% to 38,200 in the second quarter of 2008 compared to 35,400 in the second quarter of 2007. PillCam SB sales in the EMEA region increased 9.0% and sales in APAC region increased 40%. The increase in PillCam SB sales in the APAC region is mainly attributable to sales in Japan and Australia. Reorders of PillCam SB increased 15.5% to approximately 51,300 compared to approximately 44,400 in the second quarter of 2007. Reorders of PillCam SB in the Americas region grew 15.4% to 37,500 compared to 32,500 the second quarter of 2007. Reorders in the EMEA region increased 10%, while APAC reorders increased by 45%.
PillCam sales accounted for 83% of total revenues compared to 86% of total sales in the same period of last year.
Supplemental second quarter data can be found at www.givenimaging.com in the Investor Relations section.
Six Month Financial Results
For the six month period ended June 30, 2008, sales increased 18.3% to $60.2 million compared to $50.9 million in the same period in 2007. Gross profit for the six month period was 73.5% compared to 74.8% in 2007. On a GAAP basis, net income for the first six months of 2008 was $4.0 million or $0.13 per share on a fully diluted basis, compared to a net income of $694,000, or $0.02 per share, for the same period in 2007.
Additional Income Statement Information
The following charges (credits) are included in the income statements for the three and six month periods ended June 30, 2008 and in the corresponding period of 2007 (in millions of USD):
Second Qtr First Half Second Qtr First Half
2008 2008 2007 2007
---------- ---------- ---------- ----------
Stock based compensation
expenses (FAS123R) 1.7 3.2 1.2 2.3
InScope gain - (5.4) - -
IP litigation expenses 0.4 3.3 1.2 1.3
Settlement agreement
with Olympus Corporation (2.33) (2.33) - -
Increasing 2008 GAAP EPS Guidance
As a result of settling our patent litigation with Olympus Corporation, the Company is increasing full year 2008 GAAP, fully diluted earnings per share from $0.26 and $0.34 to $0.34 and $0.42.
Reimbursement Highlights
-- Medical Mutual of Ohio, serving more than 3.9 million individuals in
Ohio and South Carolina, recently updated its capsule endoscopy policy and
will allow physicians to use PillCam SB as a primary test for symptoms
indicative of small bowel tumors or Crohn's disease. In addition, Medical
Mutual will allow the use of PillCam ESO in the evaluation of esophageal
varices in patients who have esophageal varices or portal hypertension and
when EGD is contraindicated. The policy also includes the use of the Agile
patency capsule prior to the administration of the PillCam video capsule.
-- Australia's Minister of Health and Ageing approved Medicare funding of
PillCam SB in patients with Peutz-Jeghers syndrome (PJS). PJS is a genetic
condition that is characterized by the presence of gastrointestinal polyps
and a high risk of certain types of cancer including cancer of the small
intestine. It is estimated that up to 1 in 25,000 individuals have PJS.
Surveillance of these patients with capsule endoscopy has been recommended
at an interval of every two years.
Conference Call / Webcast Information
U.S. Call / Webcast
Given Imaging will host a conference call Thursday, August 7, 2008, at 9:00 a.m. Eastern time to discuss second quarter 2008 results. To participate in the teleconference, please dial 1-888-778-9069 fifteen minutes before the conference begins. International callers should dial 913-312-0849. 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 August 21, 2008 by dialing 1-888-203-1112. International callers should dial 719-457-0820. The replay participant code is 5010408.
Hebrew Call
The company will host a separate conference call in Hebrew on August 7 at 14:00 Israel time, (7:00 a.m. ET). To access this call, please dial +972-3-9180650 ten minutes before the conference is scheduled to begin. A replay of the call will be available from August 10-12 by dialing +972-3-9255900.
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 has a number of available capsules: the PillCam SB video capsule to visualize the entire small intestine which is currently marketed in the United States and in more than 60 other countries; the PillCam ESO video capsule to visualize the esophagus; the Agile(TM) 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 750,000 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.
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
June 30, December 31,
------------ ------------
2008 2007
------------ ------------
(Unaudited) (Audited)
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 43,584 $ 37,103
Short-term investments 14,001 23,191
Accounts receivable:
Trade (Net of provisions for doubtful debts of
$338 and of $329 as of June 30, 2008 and
December 31, 2007, respectively) 20,527 23,315
Other 5,802 10,385
Inventories 18,577 15,960
Prepaid expenses 1,207 1,289
Deferred tax assets 1,175 1,350
Advances to suppliers 215 190
------------ ------------
Total current assets 105,088 112,783
------------ ------------
Deposits 1,122 892
Assets held for employee severance payments 3,963 3,007
Marketable Securities 48,605 41,629
Fixed assets, at cost, less accumulated
depreciation 15,511 15,422
Other assets, at cost, less accumulated
amortization 4,614 3,583
------------ ------------
Total Assets $ 178,903 $ 177,316
============ ============
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
June 30, December 31,
----------- -----------
2008 2007
----------- -----------
(Unaudited) (Audited)
----------- -----------
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under capital
lease $ 128 $ 121
Accounts payable
Trade 9,215 7,275
Other 17,560 21,012
Deferred income 2,866 9,379
----------- -----------
Total current liabilities 29,769 37,787
----------- -----------
Long-term liabilities
Obligation under capital lease, net 508 448
Liability in respect of employees’ severance
payments 4,560 3,490
----------- -----------
Total long-term liabilities 5,068 3,938
----------- -----------
Total liabilities 34,837 41,725
----------- -----------
Minority interest 3,162 1,996
----------- -----------
Shareholders’ equity
Share capital:
Ordinary Shares, NIS 0.05 par value each
(90,000,000 shares authorized; 29,252,785 and
29,241,875 shares issued and fully paid as of
June 30, 2008 and December 31, 2007, respectively) 343 343
Additional paid-in capital 170,265 166,813
Capital reserve 2,166 2,166
Accumulated other comprehensive loss (103) -
Accumulated deficit (31,767) (35,727)
----------- -----------
Total shareholders' equity 140,904 133,595
----------- -----------
Total liabilities and shareholders' equity $ 178,903 $ 177,316
=========== ===========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Operations
In thousands except share and per share data
Six month Three month
period ended period ended
June 30, June 30, Year ended
---------------------- ---------------------- December 31,
2008 2007 2008 2007 2007
---------- ---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
---------- ---------- ---------- ---------- ----------
Revenues $ 60,196 $ 50,896 $ 33,072 $ 27,844 $ 112,868
Cost of
revenues (15,943) (12,846) (8,108) (6,824) (29,721)
Early repayment
of royalty
bearing
government
grants - - - - (4,843)
---------- ---------- ---------- ---------- ----------
Gross profit 44,253 38,050 24,964 21,020 78,304
---------- ---------- ---------- ---------- ----------
Operating expenses
Research and
development,
gross (7,689) (5,988) (3,893) (3,205) (12,847)
Royalty and
non-royalty
bearing grants 790 693 370 600 1,242
---------- ---------- ---------- ---------- ----------
Research and
development,
net (6,899) (5,295) (3,523) (2,605) (11,605)
Sales and
marketing (31,922) (25,412) (16,960) (13,906) (55,446)
General and
administrative (10,173) (9,021) (2,894) (5,078) (20,981)
Termination of
marketing
agreement 5,443 - - - 22,860
Other - - - - (422)
---------- ---------- ---------- ---------- ----------
Total operating
expenses (43,551) (39,728) (23,377) (21,589) (65,594)
---------- ---------- ---------- ---------- ----------
Operating
profit (loss) 702 (1,678) 1,587 (569) 12,710
Financing
income, net 2,466 1,929 870 727 5,520
---------- ---------- ---------- ---------- ----------
Profit before taxes
on income and
minority share 3,168 251 2,457 158 18,230
Income tax
benefit (expense) (126) (244) 33 3 (4,548)
---------- ---------- ---------- ---------- ----------
Profit before
minority
Share 3,042 7 2,490 161 13,682
Minority share
in losses of
subsidiary 918 687 394 462 1,503
---------- ---------- ---------- ---------- ----------
Net profit $ 3,960 $ 694 $ 2,884 $ 623 $ 15,185
========== ========== ========== ========== ==========
Earnings per share
Basic
Earnings per
Ordinary Share $ 0.14 $ 0.02 $ 0.10 $ 0.02 $ 0.52
========== ========== ========== ========== ==========
Diluted
Earnings per
Ordinary Share $ 0.13 $ 0.02 $ 0.09 $ 0.02 $ 0.49
========== ========== ========== ========== ==========
Weighted average
number of
Ordinary Shares
used to compute
basic Earnings
per Ordinary
share 29,251,868 28,760,450 29,252,785 28,861,380 28,961,968
========== ========== ========== ========== ==========
Weighted average
number of
Ordinary Shares
used to compute
diluted Earnings
per Ordinary
share 30,886,460 30,747,285 30,678,341 30,990,699 31,030,458
========== ========== ========== ========== ==========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
Six month Three month
period ended period ended
June 30, June 30, Year ended
-------------------- --------------------December 31,
2008 2007 2008 2007 2007
--------- --------- --------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)(Unaudited) (Audited)
--------- --------- --------- --------- ---------
Cash flows from
operating
activities:
Net profit $ 3,960 $ 694 $ 2,884 $ 623 $ 15,185
Adjustments required
to reconcile net
loss to net cash
used in operating
activities:
Minority share in
losses of
subsidiary (918) (687) (394) (462) (1,503)
Depreciation and
amortization 2,541 2,280 1,276 1,130 4,771
Deferred tax assets 175 (443) 13 (204) 24
Stock based
compensation 3,256 2,337 1,745 1,228 5,651
Excess tax benefits
related to stock
based compensation - - - - (693)
Other 9 (111) (80) (184) 380
Net decrease
(increase) in
trading securities - 3,478 - 400 5,092
Decrease (increase)
in accounts
receivable - trade 2,788 1,346 (2,163) (793) (4,428)
Decrease (increase)
in accounts
receivable - other 4,583 (1,488) (2,967) (743) (8,922)
Decrease (increase)
in prepaid expenses 82 (381) (1) 45 51
Decrease (increase)
in advances to
to suppliers (25) (133) 38 (90) (108)
Decrease (increase)
in inventories (2,617) (192) (2,017) (973) 2,208
Increase (decrease)
in accounts payable (1,785) 2,133 303 5,734 8,570
Decrease in deferred
income (6,513) (530) (21) (572) (14,903)
Net cash provided by
(used in) operating --------- --------- --------- --------- ---------
activities $ 5,536 $ 8,303 $ (1,384) $ 5,139 $ 11,375
--------- --------- --------- --------- ---------
Cash flows from
investing
activities:
Excess of cash
investment over
equity share in
subsidiary 965 - 965 -
Purchase of fixed
assets and
intangible assets (3,597) (2,005) (2,350) (1,313) (5,772)
Deposits (244) 22 (219) 33 (355)
Proceeds from sales
of marketable
securities 34,714 9,132 16,274 9,132 18,753
Proceeds from sales
of fixed assets 30 - 5 - -
Purchase of
marketable
securities (32,514) (26,797) (12,887) (9,439) (36,584)
--------- --------- --------- --------- ---------
Net cash (used in)
provided by
investing
activities $ (646) $ (19,648) $ 1,788 $ (1,587) $ (23,958)
--------- --------- --------- --------- ---------
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
Six month Three month
period ended period ended
June 30, June 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 $ (85) $ (6) $ (35) $ (3) $ (37)
Proceeds from the
issuance of
Ordinary Shares 196 2,892 - 2,540 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
(used in) financing
activities $ 1,318 $ 2,886 $ (35) $ 2,537 $ 4,936
--------- --------- --------- --------- ---------
Effect of exchange
rate changes on cash 273 (17) 98 (66) 240
--------- --------- --------- --------- ---------
Increase (decrease)
in cash and cash
equivalents 6,481 (8,476) 467 6,023 (7,407)
Cash and cash
equivalents at
beginning of period 37,103 44,510 43,117 30,011 44,510
--------- --------- --------- --------- ---------
Cash and cash
equivalents at
end of period $ 43,584 $ 36,034 $ 43,584 $ 36,034 $ 37,103
========= ========= ========= ========= =========
Supplementary cash
flow Information
Income taxes paid $ 122 $ 153 $ 47 $ 78 $ 1,098
========= ========= ========= ========= =========
Assets acquired
under capital
Lease $ 109 $ - $ - $ - $ 569
========= ========= ========= ========= =========
For further information contact:
Fern Lazar
Email Contact
David Carey
Email Contact
Lazar Partners Ltd.
1-212-867-1768
